THE INCIDENCE OF BRAND LOYALTY AMONG CONSUMERS’ OF CEREAL FOODS (A CASE STUDY OF PHINOMAR FOODS ENUGU)

ABSTRACT

This research was concerned with the incident of Brand loyalty among the consumer of cereal foods in Enugu metropolis, using Phinomar Foods in Enugu as case study. Given the background of the problems the study sought to know the existence and extent of brand loyalty among consumers of cereal foods, to determine the influence of prices of the products on brand loyalty, whether consumers perception of the attributes of the cereal foods influence brand loyalty for particular brands and such attributes includes thing as taste, Milk content sugar content dissolvability and nutritional value and finally to ascertain the extent company image and brand name influence brand loyalty. All the same, this study was restricted to six popular brands namely; Cornflakes, Golden morn Soy pops, Cocopops, White oat and Fruit Fiber.

Further, among the objectives and significance of study was to investigate the existence of brands loyalty among consumers of cereal foods and to find possible solutions to the problems identified.

This work was accomplished through the use of questionnaire oral interview, revision of previous work by different authors and the use of Top man’s formula to determine the sample size (288) and analyzed the findings by the use of Z-test method. At the end of the work it was discovered that consumers are to a reasonal extent loyal to particular brand, price, quality, products attributes, company’s brand name and image exert a significant influence on the loyalty of consumers. Also consumers have basic expectations in their favorite brands and are not naïve as advertisers would want us to believe. The orders of importance of the attributes to consumers are as follows: Nutritional value, Milk content, Taste Dissolvability and Sugar content. Based on the findings it was recommended that companies should focus on product quality and integrated marketing communication (IMC) on popular already existing brand names in the market. This will help sustainability of consumers’ loyalty.

Appendix

Questionnaire

CHAPTER ONE

INTRODUCTION

1.     BACKGROUND OF STUDY

Human behaviour is enormously varied and very complex and is predicted on attitude, learning and habit. Consumers learn from past experience and future behaviour is conditioned by such learning. Marketers, the world over differ considerably in their prediction of human behaviour.

The whole marketing effort is generally centered on the consumers. This is implied in the marketing concept echoed by most markets which is consumer satisfaction at a profit as the basis for successful marketing. In their varied description of consumers as Theodore Levit (1960) puts it, some people described consumers as unpredictable, varied, fickle, stupid, shortsighted, stubborn and generally bothersome.

This does not however, in any way make the consumers less important. Therefore the consumer is still of utmost consideration in the planning of the marketing mix or any other marketing effort. Product branding is one of such marketing effort. Products are branded for many reasons, one of which is identification of the products. Today most of the products are purchased under some particular brand. This contrast with what obtained when products were once considered simply as commodities in the early days of marketing. Commodities or goods are differentiated only by their uses and not by their suppliers. Today’s marketers recognize that the total product is greater than simply the physical good itself and believe that all goods and service can be distinguished by their own unique qualities.

A products brand carries good deal of information, reducing or eliminating the need to find out about a product before buying it. Consumers confronted with a familiars brand have information about the products images as promoted by the company. Even products that are very similar are now considered distinguishable by brand. Consumer’s perceptions of different brands of various product categories determine to a large extent their buying pattern. However O’Shaughnessy, John (1988) comments on the above claim that “different brands bought at different times could reflect different occasions, temporary changes in taste or family or wants rather than picking from a repertoire of brands with indifference as to which brand is bought. Complete acceptance of what O’shaushnessy advanced is accepting that their is no brand loyalty.

If indeed, there is no brand loyalty, in the buying pattern of consumers, then one of the main purpose of branding is defeated.

Other researchers are of the view that consumers gain experience in purchasing and consuming products, they learn what brands they like and do not like and the features they like most in particular brands. The consumers adjust purchase behaviors based on past experience. The existence of brand loyalty among consumers of a product or non-existence of it thereof could depend on the extent of consumers covered, the product under consideration and the approach employed in the search for this important consideration is product marketing.

This study seeks to find out the existence or non existence of brand loyalty among the consumer of cereal foods. The researcher is aware of the fact that brand loyalty is an exhibition of consumer’s attitude to products which is some what difficult to measure. However it is believed that just as David Relbstein (1985) puts it, the buying pattern of the product, and the proportion of purchase a particular brand bought are indications of brand loyalty.

1.     STATEMENT OF PROBLEM

The cereal foods industry in the country is experiencing a continuous increase in the number of brands competing for consumers income. From the record of importation of white oat, fruit and fiber in the early sixties as the only food cereals in the country, there has been a continual increase in the number of cereal foods in the country. Today there are no less than six different brands of cereal foods available in the market. In those early days the beverage market was the seller’s market. Initially it was white oat is the leading brand. But because it was imported as a wholly finished product, it lost its position to corn flakes following the ban placed on the importation of beverages at the beginning of the Nigeria Civil war in 1967.

Corn flakes, the product of NASCO foods Nigeria PLC, dominated the market for a long time. Consumers were multiplying, buying more of the brand. However, more firms have continued to enter the market with local plants each producing different brands of instant cereal foods. It is therefore unrealistic for any company to rest on a mere assumption of market leadership without considering the changing market share.

In today’s factored market place, things like branding products and markets share for instance no longer guarantee loyal customer. In one case after another, the old established brands have been supplemented by the rise of other brands. No single company can claim largest share of any product market in a competitive environment. These days, the idea of market share is a trap that can lull business people into a false sense of security. Managers should wake up every morning uncertain about the market place because it is invariably changing.

Companies should however not be caught in the excitement of selling things just to increase their market share. As Regis Mckenna (1991) puts its, the real goal of marketing is to own the market, not just to make or sell products. Smart marketing means defining what of the whole pie is yours. This is not just an issue of defining your market share. The company should rather be sure what share of the market is loyal to their product(s). Stopping at the idea of market share “turns marketing into an expensive fight over crumbs rather than a smart effort to own the whole pie. Owning the market demands some responsibilities such as bringing into your camp third parties who want to develop their own products, or offer new features or add-ons to argument your product. You get the first look at new ideas that others are testing in the market, you attract the most talented people because of your acknowledge leadership position. This is why it has become necessary to investigate the existence or otherwise of brand loyalty among the consumers of cereal foods drink in Enugu metropolis.

1.     OBJECTIVES OF THE STUDY

The research is basically directed towards the investigation of an existence of brand loyalty among consumers of cereal foods. To this end, therefore, the objectives of the study are to seek and possibly find solutions to the problems identified above, the extent and basis of consumer loyalty.

1.     To determine the existence and extent of brand loyalty among consumers of cereal foods drinks.

1.     To determine the influence of price of the products on brand loyalty.

1.     To determine the extent consumers perception of the attributes of the cereal food drinks influence brand loyalty for particular brands. Attributes includes such things are:

·         Taste

·         Milk content

·         Sugar content

·         Dissolvability

·         Nutritional value

1.     To ascertain the extent company image and brand name influence brand loyalty.

1.     RESEARCH QUESTIONS

Based on the research objectives, we shall face with the following questions:

1.     Does the consumer of cereal foods drink in Enugu metropolis loyal to particular brands?

1.     To what extent does price of the brands influence loyalty to a particular brand?

1.     Does consumers’ perception of attributes or quality of the brands influence loyalty?

1.     What roles does company image and brand name play in the promotion of loyalty to particular brands?

1.     HYPOTHESIS

The rationale behind this research was to determine the existence of brand loyalty among consumers of cereal foods in Enugu metropolis. For this reason, therefore the following hypotheses were made.

1.     Hi: Consumers of cereal foods are not loyal to particular brands.

1.     loyalty.

Hi:    price is not an important influence in the choice product brand loyalty to consumers’ loyalty to particular brands.

Hi:    Company image and brand name do not contribute significantly to consumers’ loyalty to particular brands.

1.     have significant impact on brand loyalty.

Hi:    Consumers perceptions of the quality of the food drinks have no significant impact on brand loyalty.

1.     SCOPE OF THE STUDY

This study is restricted to Enugu metropolis in Enugu State of Nigeria. The surrounding cities are (Uwani, Abakpa, Coal Camp, Achara-Layout, Awkunanaw, Trans Ekulu, Independent-Layout and Iva Valley). The rational was that Enugu was the capital of the defunct Eastern Region which accounted for a substantial population of the food drink market in Nigeria. Now the capital of Enugu State it is still very populous because its cosmopolitan nature.

This strategic position of Enugu Metropolis in Eastern Nigeria is a fair basis for moderate generalizations of the findings of this study for the Nigeria cereal foods market. Nevertheless, brands of cereal food drinks covered include:

1.     Corn Flakes

1.     Golden mourn

2.     Soy pops

1.     Coco pops

1.     White (quicker) oats

1.     Fruit & Fiber.

1.     SIGNIFICANCE OF THE STUDY

The percentage of consumers of cereal foods continues to drop as the economy becomes tougher and general financial melt down continue to

increase the poor performance of companies. Brand loyalty therefore becomes important in the managerial areas of marketing mix and market research. This study will therefore be of immense significance to firms in the industry in the area of manipulation of their market share, price changes of products, investment in research and development and improvement on the quality of the products.

the various positions of the brands in the perception of the consumers will emerge and enable them to assess their relative position as leaders, followers and niches in the industry.

The study will also be of great benefit to the advertising agencies, the print and electronic media whose input in the promotion of those products depends so much in the market position of the product.

Also to benefit from this study are companies seeking to introduce new products. With the identification of existence of brand loyalty or not among consumers and the factors contributing to it, the company can now find out a suitable unique selling proposition (USP) to use and appeal to their desired target market. This will also enable them decide whether to enter the market competing with the leaders, challengers, or be a follower or even niches in the industry. Finally the study will also be of great benefit to distributors and retailers who will be opportune to know the popular brands by the consumer’s assessment and take advantage of it in stocking their inventory.

1.     OPERATIONAL DEFINITION OF TERMS

·         CEREAL FOODS:

These are all members of the monocotyledonous family grain crops such as maize, wheat barley, rice, oats, rye and sorghum.

·         METROPOLIS:

Major or chief city of a state or country in other words a capital.

·         COSMOPOLITAN:

From many part of the world.

·         CONSUMERS:

These are people who make use of the product  directly.

·         BRAND:

A term use to differentiate or identify a product from the same product class.

·         BRAND Loyalty

This implies continuous patronage or consummation of a particular product all the time. It gives sellers some protection from competition and greater control planning their marketing mix.

·         CITY

This implies a concentration of people in a geographic area who can support themselves from the city’s economic activities on a fairly permanent basis.