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THE EFFECTIVENESS OF PROMOTIONAL STRATEGIES EMPLOYED BY AGRO- ALLIED INDUSTRIES IN NIGERIA.

(A CASE STUDY OF OLYMPIC MAIZE MILLING AGRO ALLIED INDUSTRIES LIMITED AWKA)

 

ABS TRACT

This research work traced the effectiveness of  promotional strategies  employed by  Agro- allied Industries in Nigeria in the promotion of their products like meshing,  casavita, yam flour, maize flour, animal feeds and vitarice. The researcher selected Olympic maize milling Agro-Allied industries Ltd. Awka as case study. He  made an adept study into the various promotional   elements and available media with their strategies.           Different structured questions were administered to respondents after reviewing similar literatures. These questionnaire were administered to both consumers and the management of Olympic Maize Milling Agro _ Allied Industries.      The research also conducted oral interview with the manager of the company from where I get much of the information  not covered in the questionnaire.

The test of two hypotheses was based on the researcher’s project topic, which tested with “a  chi square approach”.  The analysis of our data  revealed that most consumer of Agro- Allied product (Olympic) Mesolina, Olympic cassvita, Maize flour, animal feed etc became nature of the product through advertising and hence the most  effective promotional strategies being through the radio  advertising from which was followed by television with its strategically advertising from immediately  after national broadcast in the evening. The same was discovered that the most  effective media of promoting the products were radio and television which consumers rated highest and higher respectively.  More so, the management also confirmed this through the research’s analysis. The significant strategies in the promotional tools used by the management as the researcher discovered in her interview with the marketing manager and some customers are the jingles in the radio, that runs thus, the more you buy it and cook for food, the more satisfaction you get, which consumers said they found to be time. The one used in the advertisement is also effective and significant because of the way they cook it after preparing the Olympic mesolina, set it on the   table & the  family sit round the table and not their heads in affirmation and requested his to be everyday food.

Finally, we recommend what we consider appropriate measures that would enhance a more posit effectiveness on the promotional strategies to employ  in the marketing of Agro-Allied products and other similar establishment that will aid the effectiveness like the product research and development, employing the services of promotional experts and strategies  and maintain good cooperate citizens through community activities.

 

TABLE OF CONTENT

CHAPTER ONE

INTRODUCTION

1. STATEMENT OF THE PROBLEM                             18
2. OBJECTIVE OF THE STUDY                                     20
3. SIGNIFICANCE OF THE STUDY                     21     
4. SCOPE OF THE STUDY                                    23
5. LIMITATION OF THE STUDY                          24
6. HYPOTHESIS FORMULATION                        25
7. EXPLANATION OF KEY TERMS                     25

CHAPTER TWO

REVIEW OF RELATED LITERATURE                      28

1. THE ROLE OF PROMOTIONAL ACTIVITIES IN THE ECONOMIC                                                    30
2. PROMOTIONAL STRATEGY                                     32
3. ANALYSIS OF VARIOUS PROMOTIONAL  VARIABLES34
4. PROMOTIONAL OBJECTIVE IN AGRO – ALLIED  INDUSTRY                                                         40
5. PROMOTIONAL PLAN AND PLANNING        42
6. MEDIA SELECTION                                         

CHAPTER THREE

RESEARCH METHODOLOGY

1. SOURCES OF DATA                                         46
2. QUESTION DESIGN AND METHOD               47
3. DETERMINATION OF    SAMPLE SIZE           48

CHAPTER FOUR

1. PRESENTATION, A                                           51
2. ANALYSIS                                                         
3. INTERPRETATION OF DATA
4. TESTING OF HYPOTHESIS                              64

CHAPTER FIVE

SUMMARY OF FINDING

1. RECOMMENDATION                                                 75
2. CONCLUSIONS                                                  79

BIBLIOGRAPHY                                                                   80

APPENDIX A                                                               84

 

CHAPTER ONE

1. INTRODUCTION

1.1     BACK GROUND

          In the  60s the economy of Nigeria was characterized agro   Industries and production of Agricultural goods which were Exported in  its raw form  or in a semi- processed form to the out side world. The products before they were exported needed storage and protection from decay or deterioration, and that meant more cost to the agricultural products.

          The urgent  to get more value from agricultural product  and this stop importation of import substitution goods enhanced the development emphasis of agro  allied industries in various areas of the countries.  The agro- allied industries are those industries that use agricultural product as their raw material inputs to reproduce other consumer and industrial finished goods.  They are called agro- allied industries because  their component raw material good inputs contain 70.80%  agricultural produce.

The federal government encouraged  the growth of agro- allied products to lesser the importation of raw material or import substitutional goods. The agro-allied industries that needed to be examine here are tabulated below

Industries (Agro- allied	Agro- product used
Brewing Industries	Wheat sorghum, malt and Barley oranges
Wine industries	Grapes and lemon
Meat processing industries	Poetry sheep and beef
Biscuit industries	Maize wheat and Guinea
Milling industries	Corn
Milling industries	Maize, wheat, cassava, yam and Rice

 

 Promotional strategies are therefore plan activities to induce customer’s acceptance of any product offering or service.   It involves the use of appropriate communication massage through point, media electronic media, bill board vehicle advertising and others.  Strategies refer to various devices and methodologies applied in accomplishing promotion objectives.

          The preliminary  investigation carried out shows that the promotional strategies mainly carries out by these Agro –Allied industries are advertising, sales promotion, personal selling and public relations.  It further shows these strategies are used  due to the presence of massage carries, which obtain wide audience coverage aid again covers wide geographical area. These carriers of point media (news paper, magazine and business Journs) electroinc media (T.V radio, films and video tapes). These media are used to influence, persuade and attract the consumer to  make a favourable purchase in order to increase sales and profit position  of given firm. 

          Advertising is used by Agro- Allied Industries to present a new product and stimulate the patronage of the existing ones.  These agro allied companies  depends on advertising to move their goods through the channels to distribution (from manufacturer to wholesalers to the local retailers)  to develop consumer loyalty to their brands and dealers and to reduce the affect of competition. They need volume to keep their  factories operating  efficiently.

          Advertising without proper distribution of the product is wasteful, when products are vastly distribution of the product and proper media used to advertise the product, the affect can  be flexible. The main media used by  Agro –Allied companies in the industry to advertise their product are newspaper,  magazines, network T.V sport radio and out doors.  With the preliminary study carried out, four of six agro  companies in the industry proved advertising to be effective in that, they achieve 85% -95% of  the expected revenue in after their advertisement though Olympic Agro- Allied industry achieved a peng off in their sales volume it was understood that they may not know the percentage that occurred to advertising as they explained. the positive effect of Olympic advertising made it to still be in business as they use local and national newspaper, radio and TV.  The quick patronization by consumer, which the advertising influenced, made the retail and wholesaler to stock more at Olympic company’s products which gave the company sufficient, return on volume sales to repay the cost of the product and the Advertising.

          This strategy is used to encourage dealer to stock new item of build up longer stock of an established product. This is by making special after to the trade so that gaps existing in the patchy distribution of a product are flud while extra dealers and gained areas that  are poorly represented.

WAYS IN WHICH AGRO-ALLIED USES SALES PROMOTION STRATEGIES

          CONSUMER  PROMOTION

Sales promotion directed at consumers which include product launch through reduced selling prices, samples, gift and extra breaking consumer loyally and attracts trial of a new product, encourage more usage and the purchases of large sized units by regular buyers.  Olympic maize milling Agro-Allied industry is using this strategy extensive and it contributed to its consumer loyalty. 

          TRADE PROMOTION

          The Agro- Allied industry uses trade promotion to secure the co-operation of wholesalers and retailers.  For example, Olympic maize milling industries in the sale of corn and cassava flour, this manufacturers offer a buying allowance during a stated period of time.  This offer encourage dealers to big a quality  to carry a new item that they might not ordinarily buy indeed these companies made the dealers to use the buying allowance for  immediate profit.

          On this, Agro- Industries gives special incentive to wholesalers and retailers sales people so that they  display their product prominently and particularly this by issuing a designed trolley carrier containing a good number of mesoline and vita race which the retailer keep at strategic place in their big store.  The affect is that consumer purchase then first before other

          PERSONAL SELLING

          The promotional strategy is used by Agro-Allied companies when their products used as raw materials to other companies requires demonstration for instance the explain to Biscuit industries the degree to which their granulated corn flour should reach and be suitable for biscuit making. They also use this strategy to provide post –purchase reinforcement to avoid cognitive dissonance companies being  dissatisfied  after purchasing their input from the Agro- Allied Industries.  Arome form uses this where it will supply chicken to breeders and send sales force to check breeding space, housing and drugs given to chickens.  They also persuade, motivate and get the order.

          As noted, these Agro-Allied industries (beer brewing, wine marketing industry, meat processing industry, livestock industry, biscuit industry and milling industry /employ these strategies in the distribution f their product, and since these product are a bit perishable, they must ensure early distribution and dispersonal of such product. This means that the strategies  of such product. This means that the strategies for promoting  them must be effective and sustainable.

          As Dr. little (1971) rightly maintained, if the objective of advertising  (among the promotional elements) is to help sell a product, help the sales force reach hidden  buyers, improve market position on create market preference.  It means that where these are achieved, the promotion is effective but where are not achieved it is ineffective.  These is the evidence that in certain promotional strategies, advertising  acting as a partner to the personal selling can generate  sales more economical and effective than salesman himself.

          Some of the promotional strategies taken by these  Agro- Allied industries varies according to the products being promoted; some of the are:

1. Embarking on all radio and TV advertising 
2. Participating in all local and national exhibitions
3. Buy space in at least 3 local newspaper
4. Using prime time to get housewives.
5. Showing the advert on local television immediately after national news
6. Maintaining corporate citizenship in the community
7. Maintaining after sales service where necessary .

The main follow up to these strategies taken  by Olympic maize milling Agro-Allied Industries is that they are matching them with wide distribution of their products. Or this, consumer just hear or see the advert go to any nearby shop and see the product.

Before the discovery of crude oil in Nigeria, the source of living and earning of Nigeria were agriculture.  About 80% of Nigeria were engaged in agricultural through marketing, Nigeria earned foreign exchange by exporting farm products in the natural and semi- processed form products in the natural and semi- processed  form abroad. Agricultural marketing encompasses all these activities that dried the flow of agricultural product form the producer to the ultimate consumers and industrial buyers or users at a profit thereby keeping the farmers in continuos operation and at the same time ensuring the promotional movement of these farm product.  This act of marketing Nigeria agricultural products was undertaking by marketing and commodity board (now dissolved).

These exported product were in their natural and much the same way as they left the farm through in a preserved state (Ukwu I. Ukwu 1993) since  these exported products carn less foreign exchange than it would have been if processed.  This now stimulated the federal government into  action towards the establishment of Agro- Allied Industries to do the same so as to enhance the processing to agricultural product as show below  

Agricultural product	Processed form
Cassava	Garri, cassavit, cassavaite
Palm product	Palm oil and vegetable oil
Orange	Orange sguash,, wine
Coca	Beverage
Rubber	Tyres, plastic products
Maize	Mesovita, mesolina
Rice	Vitaric
Wheat	Flour and animal feeds
Meat	Baton, tinned meat frozen meat

 

So as to more foreign exchange, these are fully processed and package.  This giant stride on the part of the government was not only just to earn more foreign exchange but also to produced for local, and domestic consumption by homes and industries who rley one imported processed agriculture produce for their day to day operation followed by individual consumption.

With this objective in  mind, government initiated the selling of up of River Basin Authorities in almost all  the state of the federation with the duty of producing hamessing and processing  of agricultural product both for local consumption and exportation. The government went a step further in barring the  importation of Agro-Allied products which otherwise could  have be processed in this country of which examples are processed milk, fruit drinks, maize flour, wheat  flour animal and chemical manure (fertilizer)

Conclusively, the establishment of Agro-Allied industries in the country became a reality through series of government policies and incentives like importation of Agro-Allied plant, equipment without duty tax free holidays, and subsidizing of capital equipment where necessary to be used in the Agro- Allied industries establishment.

PROFILE OF OLYMPIC MAIZE MILLING/AGRO-ALLIED INDUSTRIES LIMITED AWKA

          When we talk of Agro- Allied Industries, we  refer to those industries engaged in the processing and utilization of agricultural based products as raw material   for further production.  For instance maize is processed used in the production of semolina, mesolina, biscuit and animal feed or it is processed into flour and exported.

          The most identical mark of  an Agro- Allied industries is that 80% of their raw material will be obtained from Agricultural is that products while the twenty percent (20%) is made of chemical  additive products and preservative used in the further production and processing  functions.

          Olympic maize milling industries, which is an Agro- Allied Industry, was established in 1988 by Chief Sir (Dr) Joe Nwankwn who is the chairman of the company. This Agro- Allied is one of the establishment  in      Nwankwu group of companies.  It was as a result of his wide experience    in business management and also business conglomerates that earned sisr Joe Nwankwu his Doctorate Degree In Business Management.

Sir Joe  in 1993 market and celebrated  his fifty (50) years in business 1943-1993).  Olympic maize milling Agro- Allied Industry is located at Awka industrial layout along  old  Enugu- Onitsha    Road Awka,  Anambra state.  The company has its administrative head quarters at Abagana also in Anambra state with the incorporation of the company under the company act of 19j4  (amended and supplemented by the company Acts of 1967 and 1976) 12 staff members were employed  of which two of them were graduates of    masters degree celebrities, five of them  were Higher National   Diploma holders

          According to chief sir (Dr) Joe Nwankwu the objective of the company are to respond to the federal government’s call towards local production and self-reliance instead of depending  on foreign made or impede product. He  also  maintained that the company was established to help in boosting the economic growth of the country. Processed  Agro –Allied based material and  products for consumption and Exportation, ensure consumer satisfaction, provide employment  and maximize profit for the survival of the business.

 

          The Agro- inputs  of the industry are maize, barely guinea corn, wheat and sorghum. Most of these inputs are supplied by the industry’s farm which is about one hundred hectares has a yearly output of about five hundred metric tonnes.  The output of the industry  are offal for animal feeds, flour for baking and confectionery industries, Semolina as foods, germ same as offal sorghum offal consumption.

          The  promotional strategies adopted by  Olympic industries

1.       Extensively placing   of advert massages on both electronic (radio and television) and print (news paper,  magazines,  bill boards posters). 

1. Personal selling by visiting industrial users of the products, taking their orders and making sure their  other get to users customers in the right state.
2. Sales promotion through novelties giving out of key holder with the company’s name, address, pens with calendars.  These gifts are give on every one hundred thousand naria (N1000000) purchase.
3. Public relation through projection of the company image in the eyes of the community, telling  the community the importance of the company giving scholarship, contribution to the repairing of roads and selling of consumer product at moderate price. 

PROMOTIONAL BUDGET BREAK –DOWN

Promotion	Budget in percentage
Advertising	50%
Personal selling	20%
Sales promotion	20%
Public relation	10%

 

          The sales manager of Olympic industry gave the rough estimate of promotional budget to the thirty   (N30,000)  annually depending on the introduction of raw products.

MANAGEMENT:

          As a result of the size of the organization, it become possible for some of the management job to be merged together like that of the chairman and managing director, secretary and public relation officer

The current organizational structure of the company is shown diagrammatically  in figure 1.1  below

Chairman/ managing Director

General manager

Agric extension  Staff

Accountant   Clerk

 

Organizational structure of Olympic maze Agro – Base at the apex of the organizational chart is he chairman and managing Director of the company who also is the chief executive  of the organization.  The company secretary has the advisory role and projection  of the organization image to the public as his major task and supply, is not   within the line of authority of the company.

          Directly below the chief is the central manager, who coordinates the entire general mangers and day to day activities of the company. Below the manager are the live managers of the various departments.  The production manager has the dual role of overseeing production and giving technical and production instructions  and advice to others and managers.

From  the little conversation, the researcher had with the marketing manager who is also charge of advertising,  there is the problem of curbing other companies from initiating the product of the industry in the market. A part from the remaining raw materials which the company imports, getting foreign exchange poses another problem  to the agricultural extension segment of the company. This problem is now taken care of.

In relation to the managing  director statement, the company   has a brighter prospect in view of the future as most  of their raw materials are sourced locally and their products are among the best and again no negative report has so far been received from the numerous customer of the  company.

THE PROMOTIONAL PROBLME FACING THE OLYMPIC MAIZE INDUSTRY

          In the early 90s the company has been the emergence    of competition both within the state and out side. The major competitors with in the state include jaluch Agro mill industries   Awka and union oak Agro –Allied industry Awka most of new and old competitor come with Aggressive advertising and promotional support as well as intensive distribution strategy.

          Olympic maize milling Agro- Allied Industry has been faced with the problem of promotional   support, as our short study seems.  Another problem is the inadequate field contacts.  Again the promotional media are not well researched to come out with the most effective ones.

          It was also noticed  that the advertisement, buyer spends time looking for Olympic products and this means not meeting distribution and demand schedule.

 

STATEMENT OF THE PROBLEM

          In Nigeria today Agro- Allied Industry is attracting a lot of investors.  This is partly in response to the federal government deliberate policy of encouraging   sustain indigenous enterprenurship in the productive sectors of the Nigerian economy and as a result of the realization on  the part of the investor.  The strategic importance of agriculture and the relevance of its processed product in the economic substance of the country more especially now that the      steady unsolving of the exchange rate of naira has rendered the available Agro-Allied products exhibiting.

          One would have anticipated that with current scaring exchange rate of naira and the consequent difficulty faced in the importation of foreign Agro- Allied product in the country. Market for these products would have been totally taken over by Nigeria enterprises but this has not been possible as a result of some factors.

          Prominent among these factors may be the attitude of some Nigerian to promotion. The  result is that the demand for Agro- Allied products has not been adequately boosted.  Another problem seem to be orientation of the producer or manufacture to promotion. These may be observed tendency on their part to overly emphasis and pursue their profit maximization motive in isolation of the consumers satisfaction.

          The net effect of all these being that the inadequately promoted product will not attract customers patronage and as such militating against the achievement of the promotional goal which often are respect purchases, company good will, increased sales and revenue and consumers loyalty.

 &n

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