Ethiopian Journal of Environmental Studies & Management 8(6): 669 – 674, 2015.

ISSN:1998-0507 doi: http://dx.doi.org/10.4314/ejesm.v8i6.6

Submitted: March 30, 2015 Accepted: August 20, 2015

MARKETING STRATEGY AND PRODUCT PERFORMANCE: A STUDY OF SELECTED

FIRMS IN NIGERIA

*OBASAN, K.A., ARIYO, O.O. AND HASSAN, B.A.

Department of Business Administration, Olabisi Onabanjo University, Ago-Iwoye,
Ogun State, Nigeria

Abstract
This study was conducted to investigate the nature of relationship between marketing
strategy and product performance with a special focus on the food and beverage industry in
Nigeria. The study used primary data gathered from 284 randomly selected staff of ten
selected companies. These companies are quoted on the Nigerian stock exchange. To do this,
a questionnaire was adopted as research instrument. The data gathered was subjected to
factor analysis and regression analysis. The results show that indeed marketing strategy
impacts product performance of the observed firms. More so, of all the factors considered
(promotion strategy, Product strategy, Distribution strategy, General marketing strategy and
Pricing Strategy) promotional factors were found to be most important, then product
strategy while pricing mix account for the least variation. This paper therefore recommends
that business organisations should accord necessary attention to the element of marketing
strategy by designing market strategies driven by a sound marketing management,
targeting and strategic positioning.

Key Words: Marketing Strategies, Product performance, Marketing mix, Marketing

management, Consumer patronage, Advertising, Marketing, Market Share

Introduction activities, not necessarily integrated either

The fundamental intent of every within itself or in its relationship with other
business entity is to produce goods and non-marketing functions of the firm. The
services that satisfy the unfulfilled needs Marketing-orientation has become a
and wants of a target audience at a profit. necessity in modern competitive world due
Marketing as a managerial function to innovation and emergence of many
identifies such unfulfilled needs and wants, products at consumers’ disposal. Many
measure their magnitude, determines which firms are expanding their operational base
target markets the organization can best in the market but most competing to
serve and decides on appropriate products, enlarge their share of the existing market
services and programs to serve these (Drucker, 1973). Hence, the need for a
markets. This connotes that marketing sound customer focus, an effective
serve as the link between material competitive advantage and competitor
requirements and its economic patterns of targeting become imperative.
response (Shama, 1993). The daunting task before the marketing
Marketing has evolved over time from a manager therefore, is to design a marketing
simple sales function to a complex group of strategy that will help concentrate
669
*Corresponding author: Obasan, K.A.
Email: agboladeobasan@gmail.com
 Marketing Strategy and Product Performance: A Study of Selected Firms................OBASAN et al.

organizational resources on market product performance to comprise market

opportunities with the goals of increasing share, profitability and technological
sales and achieving a sustainable prowess for product development and rapid
competitive advantage in the market place. implementation plans to achieve the desired
It is therefore imperative that marketers goals.
craft strategies that best achieve the The effect of marketing strategies can
marketing and organisational goals through be seen on turnover and thus on the firm’s
enhanced consumer patronage. This performance. The appropriate marketing
especially so in the modern business strategy creates impact on marketing
environment characterized by proliferation process towards the sales of an
of products making the consumer organization. The benefit of the marketing
purchasing decision process more activities in the business reflects in the
engaging. In view of this, consumers also strength of the company in eliminating or at
adapt their shopping behaviour and habits, least minimizing the effect of the various
to be able to adjust to the changing corporate challenges. The influence of
economic conditions. Studies abound on marketing activities can be part of the
how consumers affected by crises in Asia culture of the organization and can be basis
and South America made adjustments for the actions that the leaders will create in
accordingly (Ang, 2001; Zurawicki and the future. (Krohmer et al., 2002).
Braidot, 2005). Hence, the development of viable and
Similarly, firms react to these changes feasible marketing strategy is the focal
in the marketplace by taking the point of modern marketing research as few
appropriate measures to adjust their studies were based on the concepts of
corporate behaviour such as reducing costs, marketing strategies to explore its impact
cutting production, investment reduction, on product performances. But so far, few
entering new/foreign markets, working studies have accounts for these two
more with equity capital, improving variables in Nigeria business environment.
efficiency, re-structuring debt, these can Also, firms are facing dynamic competition
have no positive impact on company and rapid technological advancement in
performance unless they increase sales product development which shorten of
(Zehir, 2005; Laitinen, 2000; Uslu, 1999; product life cycles often impact of product
Beaver and Ross, 1999). performance. This study examined the use
Marketing strategy according to Weits of diverse marketing strategies and their
(1985) involves the allocation of resources consequential effect on product
to support firms in gaining a competitive performance in Nigeria.
advantage in a target market. It comprises
dual-oriented, rational, emotional and Methodology
maintenance marketing strategy (Lin, This study focused on the food and
1993). Product performance entails the beverage sector of the Nigerian economy
degree of success of new products as well with the aim of measure the effects of
as the financial results of market changes in marketing strategies on product
competition which is reflected in profit or performance. The choice of this sector is
market share (Li and Calantone, 1998). informed by the consistent track record and
Griffin and Page (1993) summarized three excellent performance demonstrated by
most common indicators used to measure most of the firms in the sector which is

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 Ethiopian Journal of Environmental Studies and Management Vol. 8 no. 6, 2015

attributed to their capacity to deliver more precise answers than a verbal or

outstanding performance at all times. In open-ended option would provide.
addition, entrepreneurial initiative and a Data Analysis
commitment to serve the Nigerian public Factor analysis was employed to
with high quality products specific and analyse responses relating to marketing
acceptable to the Nigerian taste are among strategies, in order to reduce the data into a
the driving wheels of performance. smaller number of underlying dimensions.
Companies included in the sample had to
have been in the market for at least ten Result
years. Thus we randomly selected Ten (10) Table 1 presents the results of principal
companies from the list of companies listed component analysis. The most important
on the Nigerian Stock Exchange (NSE) at factors are those relating to the promotion
May 2014. Although about 497 employees element of the marketing mix which
from the selected firms agreed to take explained about 27.2% of the total
partin the study, in response to an initial e- variation. It comprises media usage,
mailing, the subsequent questionnaire was quantity discounts and public relations
returned by 325 and after adjustments for activities. The second important factor
missing, faulty or meaningless data, data explains 19.4% of the total variance, and
from 284 were available for analysis. The relates to product strategy. Its components
effective return rate is thus 65.3 per cent of are new product development, product
the sampling frame of 497. The first part of range and product quality. The third mix
the questionnaire contained questions to was the distribution with components such
collect descriptive data relating to the as sales training, distribution channel and
companies. In the second part, respondents number of sales force. It contributes 15.6%.
were presented with 15 marketing The fourth mix was the general marketing
strategies – three each on product, price, strategy which comprises strong markets,
distribution, promotion, and three general entering new markets and moving into new
marketing strategies statements and asked business. Also, this contributes 8.2% while
as to what extent and in which direction the last mix, pricing which comprise
their company had changed those strategies coupon, trade credit and cash discount
since their commencement of business contributes only 6.4% of the total variation.
dealings. The table also showed the Cronbach
Responses were recorded by means of a coefficient for each factor which vary
five-point Likert scale ranging from between 0.62 and 0.80, while the whole
“significantly decreased” to “significantly factor analysis explains 0.768 of total
increased” through a neutral mid-point. The change. Thus, the convergent and divergent
third part of the questionnaire investigated validity of the scale are high.
changes in performance measures. In doing Table 2 below presents the mean values
this, we asked respondents to estimate the for the respondents’ performance criteria
amount of change in their firm performance evaluations. The term “active” represent
as a result of changing strategies using this respondents’ view of a significantly
five-point scale: 1-9 per cent, 10- 19 per increased performance while “inactive”
cent, 20-29 per cent, 30-39 per cent, and represents those with significantly
40-45 per cent. The purpose of using a decreased performance. The results show
numeric scale of this kind was to obtain that most respondents view sales and

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 Marketing Strategy and Product Performance: A Study of Selected Firms................OBASAN et al.

market as the best parameter followed by impact on performance, with the highest
net profit which shows a passive result. It is relationship to all other performance
clear that the successful companies measures.
increased their sales, market share and net
profit. Conclusions and Recommendation
Similarly, table 3 below shows the Judging from the various computations,
result of a simple linear regression analysis analysis and discussions, this study
used to analyze the effects of marketing revealed that marketing strategies enhances
strategies on company performance. product performance in Nigeria. Kotler
(2002) explained that individuals and
Discussion groups obtain what they need and went
From our analysis, it is apparent that through creating and exchanging products
marketing strategy has a relationship with and value with others and this stands to
the performance of the selected firms. This increase the performance of the company.
is observed from the regression results Therefore, the organization and the market
which showed that a unit change in the can benefit from any marketing strategy
level of marketing strategy will yield a developed in pursuance to make profit and
more than proportionate in the level of firm create capital continuity if properly
performance. Similarly, the correlation managed.
coefficient value of 0.8957 implies the Most of the respondent strongly agrees that
existence of a strong positive linear marketing strategies enhance product
relationship between firm performance and performance. Few agree while just a little
marketing strategy of the observed firms of the respondents strongly disagreed.
while the coefficient of determination value Hence, it can be deducted from the above
of 0.8023 indicates that 80.23% of the responses that marketing strategies enhance
selected firm’s performance can be product performance in the food and
attributed to variations in marketing beverage sector of the Nigerian economy.
strategy. This trend in performance can be Similarly, almost all of the respondents
attributed to several factors such as fair strongly agree and agreed that there is a
pricing, quality product, effective link between marketing strategy and
promotion and productive distribution product performance while the correlation
channel. The analysis shows that marketing result also support the assertion. Hence, it
strategy often result in increased sales, can be deducted from the above responses
profit, entice more customers and develop that marketing strategies enhance product
the position of the organization. performance.
The food and beverages industry is a Based on the findings from the study, we
developing and less affected by the recent recommend that companies should accord
global economic financial crisis and this necessary attention to the element of
has a positive impact on the sales of marketing strategy by designing a market
products as people have disposable income driven strategies driven by a sound
and can spend on various products, this marketing management, targeting and
therefore is a positive development for the strategic positioning. Also, since it was
industry. Similarly, a general overview of discovered that marketing strategies
the promotional strategies suggests that the enhance product performance and
size of Public Relation has the strongest productivity, there should be planning

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 Ethiopian Journal of Environmental Studies and Management Vol. 8 no. 6, 2015

ahead for new products and strategic brand Li, T., and Calantone, R.J. (1998). “The
management, strategy implementation and impact of market knowledge
control should be in place at all times. competence on new product
advantage.”Journal of Marketing,
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Table 1: Results of Principal Component Analysis

S/N Strategies Cronbach’s Alpha Variance (%) Factor loading
a. Promotion strategy 0.76 27.20
Media Usage 0.652
Quantity Discount 0.585
Public Relation 0.754
b. Product strategy 0.80 19.41
Product development 0.541
Product range 0.687
Product quality 0.593
c. Distribution strategy 0.72 15.60
Sales training 0.586
Distribution Channel 0.540
No of Sales force 0.569
d. General marketing strategy 0.75 8.23
Strong markets 0.636
Entering new markets 0.675
Moving into new business 0.852
e. Pricing Strategy 0.62 6.42
Coupon 0.546
Trade credit 0.764
Cash discount 0.529

Total Variance 76.86

KMO =0.186; P<0.000

Table 2: The mean values for the respondents’ performance criteria evaluations
S/N Criteria Number Mean
Sales Total 284 3.428
Inactive 131 3.214
Active 153 3.642
Market Share Total 284 2.998
Inactive 98 2.134
Active 186 3.864
Net profit Total 284 2.857
Inactive 116 2.056
Active 168 3.658
Average Total 284 3.186
Inactive 115 2.392
Active 169 3.980

Tables 3: Regression Result

Variable Coefficient Std. Error t-Statistic Prob.
Constant 0.082942 0.062630 1.324315 0.1865
Marketing Strategy 2.888867 0.174733 16.53306 0.0000
R 0.895736
R2 0.802343
Dependent Variable: Performance

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