Effects of Marketing Strategies On Organizational Performance
Effects of Marketing Strategies On Organizational Performance
Effects of Marketing Strategies On Organizational Performance
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Abstract: The purpose of this study is to investigate The effects of Marketing Strategies on Organizational
Performance; A Study of Nigeria Bottling Company Kaduna, including Production strategy, pricing strategy,
promotion strategy and place strategy, that eventually influences Marketing strategies on performance.
Marketing strategy has been a focus of organizations and a tool for attaining overall firm performance. Our
study contributes to the existing study of marketing strategy by supporting a relationship between marketing
strategy factors and overall firm performance. Deduction from existing literature enabled a construction of a
conceptual model that explains overall firm performance. Promotion, pricing, distribution, and product
standardization and adaptation have an impact on sales, customer and financial performance of firms. The
study suggests that the impact is mediated by marketing strategy implementation success.
Keywords: Marketing, Strategy, organizational and performance
I. INTRODUCTION
A successful marketing strategy must tell an organization where they would want to be on a long-term
basis that is why it is often said that marketing strategy is a continuous process. Marketing strategy is seen as the
marketing logic by which the business will hope to achieve its marketing objectives. In the business
organization, there is safely no activity where the marketer must not therefore make the right decision about the
four componentsof the marketing mix - price, product, place/distribution and promotion through the
employment of marketing strategy. These key components must be coordinated and moved into a unified
effective strategy if the product must perform well in the market. It consists of specific strategies for target
markets, marketing mix and marketing budget.
The recent globalization market has made companies to view the internationalization of their activities
and events as a way to remain competitive in the market. Marketing strategy has become a relevant tool in the
world for any organization to remain in the competitive market environment and become stronger.
Marketing strategy can be defined as a plan by a company to differentiate the company to differentiate itself
positively from its competitors, using its relative strength to better satisfy customer needs in a given
environment (Jain, 2004). Marketing strategies entails the set of actions designed to achieve competitive
advantage and achieve better than average results by intelligent and fact-based selection among alternative
leading to such advantage (Shane, 2000).
There are diverse definitions of marketing strategy and such definitions reflect numerous perspectives
(Li and Calantone, 2000). However, the agreement is that marketing strategy provides the avenue for making
useof the resources of an organization in order to ascertain its set goals and objectives. Marketing strategy is
defined as a given market area, the proper distribution of resources to support enterprises to win competitive
advantage. Goi (2005) defined marketing strategy as a set of marketing tools that firms utilize to pursue their
marketing objectives in the target market; the view which was earlier expressed by (Gronroos, 1999 and
Osuagwu, 2006). Therefore, the function of marketing strategy is to establish the nature, strength, direction, and
interaction between the marketing mix- elements and the environmental factors in a specific situation.
According to (Owomoyela, et al, 2013), the purpose of the development of an organization's marketing strategy
development is to create, build, defend and maintain its competitive advantage. Managerial judgment is very
important in keeping up with environmental ambiguity and uncertainty in strategic marketing.
More so, depending on the nature of business, strategies may have other dimensions as well. At the
heart of any business strategy is marketing strategy. Businesses exist to deliver products to the markets to an
extent that they serve this purpose efficiently through profit maximization. All these are marketing efforts. The
objectives of an organization have to be considered, particularly on customers' satisfaction and increasing their
sales volume at profits making.
Most companies today in Nigeria and the world at large operate in an increasing complex and unstable
environment. Coca-Cola Bottling Company Plc. is one of the multinational companies that are involved in the
production of non-alcoholic drinks. Nigerian Bottling Company Ltd (NBC) is incorporated in November 1951,
as a subsidiary of the A.G. Leventis Group with the franchise to bottle and sell products of The Coca Cola
Company in Nigeria. Two years later in 1953, the production of Coca-Cola begins at a bottling facility in Ebute-
Metta, Lagos State. In the same year the company opens its first bottling plant in Apapa. NBC becomes a
member of the newly formed Coca-Cola Hellenic Bottling Company S.A. (an anchor bottling group with
operations in 28 countries worldwide). Competition among other Bottling Companies has called for intense
application of marketing strategy tools that will appeal to customer for sustainable patronage by each of these
bottling companies.Challenges are facing companies to seek the best management and marketing strategies, to
grow the company's performance and increase shareholders value.
Excellent companies are known not only by well-conceived marketing outlining where, when and how
the companies will compete but also by their ability to execute the marketing strategy decision option selected
(Chris, 2006). Appropriate and effective executed marketing strategies are required to productively guide the
deployment of available resources where the company marketing strategy abilities in pursuit of desired goals
and objectives (Michael, 2002; Chris, 2006; Frances & Stephen, 2006; Michael, 1997). The customers are now
better educated and the global whole of business today is a very complex one. In order to satisfy the changing
need of customers, companies must first know their needs and that is where marketing strategy begins. For a
company to survive in today's competitive market, it has to strategize in satisfying customer's needs more
effectively and efficiently through marketing strategies. It is in line with this that the study is carried out on the
effect of marketing strategies (product, promotion, price and place) on organizational performance (profit, sales
volume, and market share and customer loyalty) of Coca-Cola Bottling Company Plc.
V. LITERATURE REVIEW
5.6.1 Conceptual Framework on Marketing Strategy
The word strategy was originally used in amilitary context before being adopted by many other fields.
A strategy is a long-term course of action designedto achieve a particular goal. It is differentiated from tactics in
International Journal of Business Marketing and Management (IJBMM) Page 2
EFFECTS OF MARKETING STRATEGIES ON ORGANIZATIONAL PERFORMANCE
that a tactic refers to an immediate action usingresources at hand. When applied in a business context, a strategy
refers to a set of managerial decisions andactions that aims to differentiate the company from competitors and
sustain its competitive advantage. Acompany's strategy must be appropriate for its mission, resources and
environmental circumstances.
Accordingly, a marketing strategy can be defined as a plan by a company to differentiate the companyto
differentiate itself positively from its competitors, using its relative strength to better satisfy customer needs in a
given environment (Jain, 2004). Marketing strategies entails theset of actions designed to achieve competitive
advantage and achieve better than average results by intelligentand fact-based selection among alternative
leading to such advantage (Shane, 2000).
3Es, and mathematically, it could be represented as follows: Performance = Efficiency + Efficacy + Economies.
It can be noticed the fact that an entity is successful when it is efficient, effective and economical. Therefore, to
be successful means combining all three variables, the combination of which reflects the performance level of
an entity. Efficiency consists in either using a quantity given by resources, aimed at the highest level of the
achieved results, or reducing the quantity of the used resources with the aim of achieving a predetermined result.
Economies consist in providing the means, the necessary resources to performing an activity at the minimum
cost. Efficacy is determined by achieving or exceeding the predetermined results to the actual results made
throughout the development of the activity. This represents the ability of the enterprise to meet and even exceed
the expectations of users of the accounting information (shareholders/associates, clients, suppliers, employees,
government) at the same time with reaching the predetermined organizational objectives. An entity reaches
efficacy when it manages to improve the way of using all sources which are available and necessary to the
development of the activity, performing as well as possible the needs and the requirements of the external
partners of the organization.
5.6.4.1 Profit
According to www.businessdictionary.com, a profit is a financial gain especially the difference
between the amounts earned and amount spent in buying, operating, or producing something. Profit can also be
seen as surplus remaining after total cost are deducted from total revenue and the basis on which tax is.
Profitability is the primary goal of all business ventures. Without profitability the business will not survive in
the long run (Simons, 1999). So measuring current and past profitability and projecting future profitability is
very important. Profitability is ability of a company to use its resources to generate revenues in excess of its
expenses. In other words, this is a company’s capability of generating profits from its operations. The other
three are efficiency, solvency, and market prospects. Investors, creditors, and managers use these key concepts
to analyze how well a company is doing and the future potential it could have if operations were managed
properly.
The two key aspects of profitability are revenues and expenses (Ambler, Kokkinaki and Puntoni,
2004). Revenues are the business income. This is the amount of money earned from customers by selling
products or providing services. Generating income isn’t free, however. Businesses must use their resources in
order to produce these products and provide these services. Resources, like cash, are used to pay for expenses
like employee payroll, rent, utilities, and other necessities in the production process. Profitability looks at the
relationship between the revenues and expenses to see how well a company is performing and the future
potential growth a company might have. There are many reports to use when measuring the profitability of a
company, but external users typically use the numbers reported on the income statement. The financial
statements list the profitability of the company in two main areas. The first signs of profit show in the profit
margin or gross margin usually calculated and reported on the face of the income statement. These ratios
measure how well the company is using its resources to generate profits. The second sign of profit isn’t really a
sign; it’s more like the real thing. The income statement always reports the net income at the bottom of the
report. This is often the true sign of profitability because it shows external users the total amount of revenues
that exceeded the expenses during the period.
however, discourage making market share an objective and criterion upon which to base economic policies
(Armstrong and Kesten 2007). The aforementioned usage of market share as a basis for gauging the
performance of competing firms has fostered a system in which firms make decisions with regard to their
operation with careful consideration of the impact of each decision on the market share of their competitors. It is
generally necessary to commission market research (generally desk/secondary research) to determine.
Sometimes, though, one can use primary research to estimate the total market size and a company's market
share.
ii. Promotion
Many researchers have emphasized the importance of promotional mix to business markets as a
valuable tool for achieving performance. Sales, financial and customer performance is achieved through
promotional mix by gaining experience in the opportunities and problems arising in specific export markets,
boosting communication, personalizing relationships, and cultivating a team spirit with customers abroad, and
providing timely response and immediate support to the export venture’s needs. The study by Ambler and
Puntoni, (2004) examined six promotion-related variables, i.e., advertising, sales promotion, personal selling,
trade fairs, personal visits, and promotion adaptation, for their effects on export performance. Most of the
promotional related variables were found to be positively linked to firm performance. Notably, advertising was
the most widely researched variable of promotional mix, based on the notion that with sound advertising
procedures the firm can communicate information, constantly remind, and persuade foreign customers to buy
the products and, therefore, generate more sales.
VI. METHODOLOGY
This research therefore covers the selected Nigerian Bottling Company in Kaduna. Secondary data
were obtained through books, journals, and internet. Empirical works of other scholars were consulted. A simple
size of 245 was obtained from the population of 635at 5% error tolerance and 95% degree of freedom using
Yamane’s statistical formula 245(100%) of the questionnaires distributed 213(87%) were returned and 32(13%)
were not returned. The questionnaire was designed in Likert scale format. The researchers conducted a pre-test
on the questionnaire to ensure the validity of the instrument. Pearson Moment Product Correlations coefficient
was used to test the hypotheses.
Hypotheses One
H0: There is a significant relationship between product strategy and the level of profit of Nigeria Bottling
Company.
H1: There is no significant relationship between product strategy and the level of profit of Nigeria Bottling
Company.
Table I: Table of correlation between product strategy and the level of profit of Nigeria Bottling Company
Correlations
product the level of profit of Nigeria
Strategy Bottling Company
Product Strategy Pearson Correlation 1 .293**
N 213
the level of profit of Pearson Correlation .293 ** 1
Nigeria Bottling Company
Sig. (2-tailed) .000 200
N 213
Table II: Regression analysis test of product strategy and the level of profit of Nigeria Bottling Company
Model Summary
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1(Constant) 3.433 .187 18.342 .000
Production strategy .060 .057 .072 1.054 .293
Dependent Variable: Level of profit
From the coefficients table above, the p-value was obtained to be 0.293 which is greater than 0.05
(5%). Therefore the null hypothesis “there is no significant relationship between product strategy and the level
of profit of Nigeria Bottling Company” will be accepted and can conclude that there is a no significant
relationship between product strategy and the level of profit in Nigerian Bottling Company, Kaduna.
In summary, based on the foregoing, majority do not support hypotheses one. There is no significant
relationship between product strategy and level of profit. Product strategy had a negative correlation with the
level of profit in Nigerian Bottling Company, Kaduna and supports the concept that the company will make
more profit without the utilization of the product strategy. Hypothesis one which states that “there is no
significant relationship between product strategy and level of profit in Nigerian Bottling Company, Kaduna” is
accepted.
Hypotheses Two
Ho: There is a significant relationship between promotional strategy and the sales volume of Nigeria Bottling
Company Plc.
H2: There is no significant relationship between promotional strategy and the sales volume of Nigeria Bottling
Company Plc.
Table III: Table of Correlation between Promotional Strategy and the Sales Volume of Nigeria Bottling
Company Plc.
Correlations
Promotional Strategy The sales volume of
Nigeria Bottling Company
Plc.
Promotional Strategy Pearson Correlation 1 .685**
Sig. (2-tailed) 200 .000
N 213
the sales volume of Nigeria Pearson Correlation .685 ** 1
Bottling Company Plc. Sig. (2-tailed) .000 200
N 213
**. Correlation is significant at the 0.01 level (2-tailed).
Table IV: Regression Analysis Test of Promotional Strategy andthe Sales Volume of Nigeria Bottling
Company Plc.
Model Summary
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
(Constant) 3.559 .216 16.464 .000
Promotional
.027 .067 .028 .407 .685
Strategy
Dependent Variable: Sales Volume
From the coefficients table above, the p-value was obtained to be 0.685 which is greater than 0.05
(5%). Therefore the null hypothesis “there is no significant relationship between promotional strategy and sales
volume of Nigeria Bottling Company” will be accepted and can conclude that there is a no significant
relationship between promotional strategy and sales volume in Nigerian Bottling Company, Kaduna.
In summary, based on the foregoing, majority do not support hypotheses two. There is no significant
relationship between promotional strategy and sales volume. Promotional strategy had a negative correlation
with sales volume in Nigerian Bottling Company, Kaduna and supports the concept that the company will make
more sales without the utilization of promotional strategy. Hypotheses two which states that “there is no
significant relationship between promotional strategy and sales volume in Nigerian Bottling Company, Kaduna”
is accepted.
resulting in the conclusion that there is no significant relationship between promotional strategy and sales
volume in Nigerian Bottling Company, Kaduna.
IX. CONCLUSION
This study concluded that marketing strategies (product, promotion, price and place strategies) does not
have important role and impact on organizational performance in Nigeria Bottling Company, Kaduna. In
essence, marketing strategies (product, promotion, and price and place strategies) are not useful tools for
survival, sustenance and expansion of Nigeria Bottling Company, Kaduna.
The study revealed that there is no significant relationship between product strategy and the level of
profit, there is no significant relationship between promotional strategy and the sales volume, there is no
significant relationship between price strategy and the market share and lastly there is no significant relationship
between place strategy and the level of customer loyalty in Nigeria Bottling Company, Kaduna.
The study revealed that the utilization of product strategies enhances the level of profit in Nigeria
Bottling Company Kaduna, product is anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need, product is about quality, design, features, brand name and sizes
and these influences the level of profit of Nigeria Bottling Company, the use of promotional strategies enhances
sales volume in Nigeria Bottling Company and also that promotion usually provides target audiences with all
the accurate information they need to help them take decision.
Further conclusions of the study are that promotional media such as the use of television, radio,
newspapers and magazines facilitate an increase in sales volume in Nigeria Bottling Company, promotion is not
the function of information, persuading and influencing the consumers' purchase decision, haphazard pricing
techniques can not confuse and alienate customers and endanger the company's market share, price is important
because it regulates the economic system and influences the prices paid for all factors of production, price is an
important factor in building long-term relationships with customers, price is a signal of a product's or service's
value to an individual and different customers assign different values to the same goods and services, place
strategy influences customer loyalty of Nigeria Bottling Company products, place strategy encompasses all
decisions and tools which relate to making products and services available to customers and also that place
strategy calls for effective distribution of products among the marketing channels such as the wholesalers or
retailers.
X. RECOMMENDATIONS
In view of the findings, the following recommendations are made:
i. Nigeria Bottling Company Kaduna should as a matter of urgency embark on more aggressive product
strategies so as to drive its products and servicesto the target market and to further improve thefirm’s level of
profit.
ii. Nigeria Bottling Company Kaduna should invest more in promotional activities to createawareness of its
products and services and enable the products sell in the market so as to increase the salesvolume of the
company.
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