The Marketing Strategies of the Paint Industry (A Case Study of Saclux Paints Limited) Part 2

In this chapter many literatures by eminent scholars that relate to the research topic were reviewed.  This review of the literature looks at the concept of marketing and its effectiveness as a strategies of saclux paint industry.  The literature review provides the theoretical framework on which the whole study stands, it is an examination of all relevant issues and variables related or inherent in the study.  The review also takes the research to past revelations on findings by previous scholars”.

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        According to Stanton W. J. (1975) Marketing is a total system of business activities designed to plan, price promote and distribute want-satisfying products and services to present and potential customers, another group sees it as the process of a society by which the demand structure for economic goods and services is anticipated or enlarged through the conception, promotion, exchange and physical distribution of such goods and services pride and ferel (1985) maintain that marketing consist of individual and organizational activities aimed at facilitating and expediting exchange within a set of dynamic environmental factors.

        The American marketing association in 1985 defined the discipline thus:

        Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideals, goods and services to create exchange that satisfy individual and organizational objectives”.

        Philip Kotler (1988) and he sees marking as a social and managerial process by which individuals and groups obtain what they want and need through creating and exchanging products and values with others.

        Back home in Nigeria, Udeagha (1993) maintains that marketing involves the use of intellectuals, technical, managerial and spiritual skills in the solution of the essential needs of man in providing him with all the goods and services he requires to survive, prosper, and to be happy on earth.

        Finally, for Kalu (1998) marketing is the process of researching into, and identifying customer needs and wants for the purpose of creating goods and services and for facilitating their transfer into the hands of customers through the specialized functions of pricing, promotion and distribution.

2.2      MARKETING MIX DEFINITION

Philip Kotler sees the marketing mix as “the set of controllable variables that the form can use to influence the buyer responses”.

 McCarthy, on his part, classified the variables into four factors called the “four PS” of marketing: Product, Place, Promotion, and price.    The implication here is that buyers are usually influenced by variable, related to the product, and the place, promotion, and price.

Every marketing strategy must have a marketing mix, as well as target market.

Product – The product area is concerned with developing the right “ product” for the target market.  This product may involve a physical object and / or some combination of services.  The crux of the matter in the product area are to develop something that will satisfy some customers needs.  Product or brand managers may handle these matters for manufacturers.  Under product, attention should go to problem connected with developing products and product lines.  Consideration should also be given to the characteristics of various kinds of product with a view forward developing generalization about product classes.  The product area is only one of the four Ps, but how potential customers view the product has a bearing on the marketing mix.

        Place (Distribution) – Reaching the target – a product is not much good to a customer if it is not available when and where it is wanted.  So, in the place area, consideration is made of where, when, and whom the goods and services are to be offer for sale.  Goods and services do not flow from producers to consumers automatically.  They move through channels of distribution where a good deal of marketing work is done.  Any sequence of marketing institutions from producer to find user or consumer, including any number of middlemen, is called a channel of distribution.  Marketing managers work is and through such channels so our study of place is very important to marketing strategy, planning manager, sales manager, physical distribution managers and many specialized middlemen do the work in the place are.

PRICE:Considering pricing, management must determine the right base price of its products and then establish policies for dealing with discounts fright payments and many other price – related situations price can be defined as the amount of money needed to acquire a given qualify of goods and services”.

PROMOTION:  Includes all the activities the company under takes to communicate and promote its products to the target market.  As an element of the marketing mix, promotion  is used to inform the consumers/users –regarding a firm’s product and/ or services, and to persuade them – market – into buying.  The major promotional activities include advertising sales promotion, and personal selling.

        It is note worthy that the concept of the marketing mix is also applicable to non-business and/ or non-profit making organizations.

PRODUCT POSITIONING:  William J. Stanton is his book fundamentals of marking, defines product positioning as “the image that the product projects in relation to

(1)    Competitive product and

(2)    Other products marketed by the company in question.

ADVERTISING:  According to the institute of practitioners in adverting, advertising is defined as  “the most persuasive possible selling message to the right prospects for the product or services at the lowest possible cost.

SALES PROMOTION:  Philip Kotler sees sales promotion as “ a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular product or services by consumers or the trade” example includes:

(i)     Free samples:  It offers the greatest chance of  getting a consumer to equally try the product free samples might be marked, delivered door to door or attached to or inserted in another package.

(ii)    Coupons:  Philip Kotler says “ these are certificates which when presented for redemption at a retail store, entitled the bearer (consumer) to a stated savings on the purchase of a specific product.

(iii)   Premiums:  Are items of merchandise offered free or at a low cost as a bonus to purchasers of particular products.  Some of these are, in pack, on-pack and war pack premium etc.

(iv)   Logistics:  Is defined as “the management of all activities that facilitate the movement and co-ordination of supply and demand in the creation of time and place utility in goods and services.

        Philip Kotler defines market logistics as “Involves planning, implementing and controlling the physical flows of materials and final goods from points of origin to points to use to meet customer requirements at a  profit.

Strategy:  Leaned etal (1965) for instance, defines it as the pattern of objectives, purpose or goals and major polices and plans for achieving these goals, states in which a way as to define what business the company is in or is to be in and the kind of company it is or is to be.  Glueck (1976) defines it as a unified , comprehensive, and integrated plan designed to assure that the basic objectives of the enterprise are achieved.

        Strategy is a comprehensive description of an organization’s master plan for achieving its objectives and purpose.  It addresses the issue of how the desired results are to be accomplished.  It is a means to an end, the outline of how things are to be done.  Strategy is derived from the Greek word (stratego) meaning general.  Chrandler (1962) defines it as the determination of the basic long-range goals of an organization.

        General Electric, a pioneer of strategic management techniques, Once defined strategy as “a statement of how, what resources are going to be used to take advantage of which opportunities to minimize, which threats to produce a desired result”.    This definition points towards the issues that

(a)    How to respond to changing conditions specifically, what to do about shifting customers need and emerging industry trends, which new opportunities to pursue, how to defend against competitive pressures and other externally imposed threats.

(b)    How to allocate resources over the organization various business units, divisions and functional various business units, divisions and functional departments.

(c)    How to compete in each one of the industries in which the organization participates, decisions about how to develop customers appeal, to position the firm against rival etc.

(d)    What activities and approaches to take in each of the major functional area and operating departments in order to create a unified and more powerful strategic effort throughout the unit.

        Nnedu (1996) maintains that strategy points out the way to achieve corporate goals and is designed with those goals in mind.

The concept and trend of strategy formulation has no definite pattern.  Okeafor (1996) argues that strategy formulation varies from one company to another, depending on the size, products, services and markets served.  It is an organization’s intend process from which factors and programmers of action are developed.

One difficulty is the existence of very many levels of strategies ranging from operating strategy, co-operate strategy, line of business strategy, functional strategy marketing strategy etc.  Though each level of strategy  has its own distinctive factors, there is, however, a similar approach to strategy formulation.  Nnedu (1996) stressed that while determinants from the basis for and/or influence and affect the make-up of organization’s strategy, the challenge of actually formulating the strategies still remains a crucial part of top management’s responsibility.  Bridges and Barlull (1977) likened the strategy formulation process to a problem solving exercise that can be done in six-steps.  Their approach pre-supposes the existence of some strategies in an organization in which new strategies are called for; the six steps include:

(1)    Identify and record current strategy:  This has to do with identification of existing strategies within the organizational network and trying to see if these strategies will enable them achieve desired objectives.

(2)    Identify the problems:  The current strategy should next be examined to see if it has problems that will significantly affect the operations of the organization.  The present strategy should be analyzed against its ability to cope with the demands of the external and internal environments.  Significant weaknesses have to be noted and evaluated.

(3)    Discover the core elements: If the evaluations and reappraisals above indicate the existence of problems, the organization has to identify the core of the problems.  The real problems can take many forms and their implications on future operations should be determined.

(4)    Formulate alternative strategies:  Having identified the weaknesses of the current strategies, then management can proceed to develop alternative strategies.  These must equally be done with the objectives of the organization in mind.  Therefore, all possibilities that offer chances for solving the problem should be thoroughly examined and considered.

(5)    Evaluate the alternatives:   Management should next examine the advantages of the various alternative strategies developed in stage iv.  The policy implication of these strategies should be evaluated.  Consideration should focus on the relative competitive advantage, management preference and ethical consideration.

(6)    Choose the new strategy: A new strategy is thus chosen.  The chosen strategy should help reduce or minimize other problems.  Top management should equally be committed to implementing these strategies and all further organizational priorities should be built round the preferred strategies.

        However, there can exist situations where no strategy existed.  These include conditions when organizations are new and may require an entirely new strategy.  The strategist here would have to formulate start-up strategy for the new organization.  The approach from the on-set would be to identify the organization’s missions and objectives from the founders and owners of business and design strategies that could help accomplish these targets.  The proposed strategy formulation steps suggested by Bridges and Barlull could be modified to provide a meaningful direction to the strategist.

Kotler (2000) compared marketing strategy to ‘game plan’ required to accomplish stated objectives.  Anyanwu (1999) saw marketing strategy as skillful plans by marketing practitioner to take advantage of competitions in the market place.  Marketing strategy: include distribution strategies, promotion strategy to enhance image and create brand insistence.  The product sub strategy should include strategies regarding quality, quantity, raw material ratios etc.  Porter also defines strategy “as the creation of a unique and valuable position involving a different set of activities.

MARKETING STRATEGY, Michael porter has condensed then into three generic groups:

(1)    Overall cost leadership:  Here the business works hard to achieve the lowest production and distribution cost so that it can price lower than its competitions and win a large market share.

(2)    Differentiation:  Here the business concentrates achieving superior performance in an important customer benefit area valued by a large part of the market.  It can strive to be the service leader, the style leader.

(3)    Focus:  Have the business focuses on one or more narrow market segments.  The firm gets to know these segments intimately and pursue either cost leadership or differentiation within the target segment.

(1)    DIFFERENTIATION STRATEGY

        A differentiation strategy is one in which a product offering is different from that of one or more competitors in a way that is valued by customers.  The value- added should affect customer choice and ultimate satisfaction.

(2)    COMPETITIVE MARKET STRATEGIES

        A market place is like a battlefield with firms designing their various strategies with a view to remaining dominant in the market.

        Thompson and Strickland (1981) discussed a number of strategic options that an organization can use to compete effectively in its own market.  The use or adoption of these strategies is however dependent on the level of market share the business is enjoying.

Some of these strategies are:

(a)    Strategies for Low-market share business.

        A low market share business is one whose market share is below the share of the market leaders.  These businesses can operate effectively if they adopt any of the following strategies.

(i)     The unsatisfied niche strategy – This calls for the targeting of market segments that have not been attended to by the industry’s players.

(ii)    Specialist strategy – This strategy advocates the concentration of business on a particular product/service so that the firm will improve and serve. Its markets more efficiently.  Other options include channel innovations and distinctive image strategy.

(B)    Strategies for the dominant business

        These are business that enjoy relative high market share in the industry.  Strategic options open to these businesses are:

(i)     Offensive strategy:  This strategy preaches continuous innovation and creativity to remain dominant in the market place.

(ii)    Fortification strategy:  This strategy enjoins the firm to protect its chief products with patents, and generally make entry into its market difficult for the small ones.

(iii)   Maintenance strategy:  this is the strategy that encourages the market leader to maintain its current level of marketing activities.

There are many basis and cogent reasons for devoting time and energy to study marketing strategy.

Organizations are never completely static.  They are in continuous interaction with external forces changing consumer attitudes and tastes, government legislations and new technologies, all acts in the organization to make it change or adapt to current situation.  Faced with this phenomenon, every organization should continuously take strategic decisions in every aspect of its operations to achieve its ultimate goals.  Marketing strategy, therefore, put a stop to drifting over polices and decisions in organizations.

With its concepts, models and methodologies, marketing strategy offers great assistance to critical analysis and difficult strategic decisions.

It provides the basis for managing and controlling a business strategically.  It also provides a means to communicate, co-ordinate problems and proposed strategies both horizontally and vertically within the organization.

In summary strategic marketing management has as a mission the development of strategies that are externally oriented, proactive, timely, entrepreneurial, global, implement able and appropriate for a long time horizon.  (Aaker 1998) furthermore, its importance is equally criticized from the fact that it provides an approach to raising and addressing strategies issues and managing complex organizations in a context of rapidly changing and increasingly unpredictable external pressures and threats.

(1)    The marketing strategy stands at the heart of the marketing plan as the basic statement of how the various controllable marketing variables will be used to achieve marketing objectives.

(2)    Marketing strategy is the first real test of the competence of the marketing planner who, up to this point, has analyzed the current situation and set objectives.

(3)    It is the test that brings together understanding, imagination vision, and decisiveness to give direction to the entire marketing effort.

(4)    Marketing strategy provides the framework within which specific strategies and plans are developed for each area of marketing activities.  An important part of this framework is the clarification of the interrelationships between the various elements of the marketing mix between advertising and sales promotion between distribution and pricing, between product and packaging.  Finally marketing strategies provide only a general direction.

It is popularly said that information is the life blood of any organization.  Many organization and individuals used data for their day-to-days operation and/or living various approaches abound from which data can be extracted.

Information is necessary in a project work.  The techniques of obtaining the desired data are numerous.  However, they can be classified into two broad groups namely: primary and secondary sources of data.

These are the original sources created and utilized to collect facts and issues relevant to a subject, topic or project being investigated or studies as opposed to existing sources.  It is information obtained directly from its source.  The essential thing is that it is most specific to the work to be done in that, its design is executed with the aims of directing the information obtained to meeting the problem(s) in question.  It involves data, which are not available in published form or in company records.  The sources of this kind of research information cannot be as easily identified as the sources of secondary data.  Actually, the identification of possible sources is a logical step beyond the determination of purpose(s) and scope of the study.  Here three methods were taken into consideration of the purpose (s) and scope of the study.  They are questionnaire, oral interview and observation.  These are the primary sources of data.

QUESTIONNAIRE:  For the fact that questionnaire containing both structural and unstructured questions were prepared and distributed to marketers and sales personnel or some paint industries in Umuahia.  It was so structured to generate detailed information from the company and also from distributors.

        The questions were such that attempted to cover the fundamental areas of marketing product, price promotion, place and package, including other socio-economic and political problems.

OBSERVATION:  This was greatly extensively employed to complement information gathered.  The team “Observation” in research has been defined as the “act of recognizing the nothing facts or occurrence.”  During her calls to these forms dealers, the researcher was very careful to note what was going on, the reactions of both sellers and buyers, the social class of the buyers as depicted by their dressing etc.

ORAL INTERVIEW:  This was extensively employed to complement information gathered from the questionnaire.  Infact, much of the information collected was through this approach, because most firms to whom questionnaire, were sent to did not answer all the questions but by interviewing them, much data was collected.

        Those interviewed include manager production, and sales officer in saclux paints at Amauzokwu Umuahia, sales officer clover paint Umuahia depot and some distributors in Umuahia and Owerri.  The oral interview was most fruitful as many respondents were resistant when it comes to uniting things down especially among distributions.

Secondary data is information that has been collected by persons or agencies for purposes other than the solution of the problem at hand.  The federal government collects and publishes information on the numbers of families, family formation, income, and sales volume of retail stores, all by geographic area.

Trade journals are valuable source of secondary information, they are special studies done by other advertising media.  They provide a general and useful insight into the subject matter and very vital as the source of information.  More examples of secondary data includes journals, magazines, newspaper, encyclopedia, dictionaries are some of the examples of secondary source of data.

The approaches used have been high lighted above, to re-state that questionnaires were designed and sent out to respondents.  These were personally delivered and response collected interviews conducted were based in the content of the questionnaires with the view of expanding the information received.  Some of the interviews were conducted outside the business premises as the student had to track down the respondent in their homes and places of relaxation. The observations made were discussed during the interviews.

The desk research was systematically done to cover all existing sources that I found myself within the environ I carried out the research.

Various alternative methods exist from which data can be collected for the study of this nature.

However, the techniques adopted have ensured savings in costs and time, adequate provision of reliable and relevant information that facilitated the presentation and analysis of out comes, and finally enable the demand of this study to be satisfied by providing a wide range of information.

The population of the study was made up of 100 staff of Saclux Paint Umuahia Abia State.  And this 100 was made up of the produces, marketer,  consumers  and then producers of paints.

This is unit or proportion of the entire population, selected for observation, interviewing and analysis with a view that the proportion represents the entire population.  The sample size is 62.