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CHAPTER ONE – INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Beer has been widely consumed from time immemorial by the consumers around Nigeria and in Onitsha Anambra state in particular for several reasons like relaxants and euphoric effect, recreational purposes, for artistic inspiration as aphrodisiac and so forth of beer consumers.

In Nigeria and Onitsha Anambra state in particular, the brewing industry has grown tremendously. A report by Vetiva capital, an investment and research firm predicts that the volume of beer produced in Nigeria per year would grow from 15 million hector liters (1.5 billion liters) in 2009 to 23 million hector liters (2.3 billion liters) in 2015 and puts beer per capital consumption at 10 liters.

In another development, Mitchel and Tomo (2005) observed that years ago, there were handful of beer brands in Nigeria, but today, there are several breweries brewing millions of hector liters of beer under different brand name including Guinness stout, star beer, harp beer, Gordon spark, Heineken beer, Becks beer, Champion beer and many more such large volume of production and availability of such different brands in the market has led to the cut-throat competition for increased market share being witnessed among operators in the industry, when competition is keen and the manufacturers are faced with brand choices, it becomes imperative for the manufacturers to understand the major factors that can attract the attention of buyers to his own brand.

Beer is the most popular alcoholic drink in Nigeria, making up about 96% of all alcoholic sales according to Vetiva report, 2011 that, the country has second largest beer market in Africa, after South Africa. Analyst project growth in value sales of 16.8% in 2010 and annual growth of 23.45% between 2011 and 2014.

The competitive landscape in Nigeria beer market is shaped by the following players: Nigeria Breweries plc., Guinness Nigeria plc, consolidated Breweries limited, Jos International Breweries limited, Golden Breweries and Premium Breweries respectively. Nigeria Breweries is the market leader and has a grip of 60% market share in the sales of large beer according to Vetiva report of 2011. The company’s leading products are star beer, Guilder, Heineken beer, and Extra Smooth. Guinness Nigeria plc. is the second largest in the market and leads European Journal of Business and management. The country in the sales of stout beer by 91% among other brands of stout, such as Extra smooth, legend stout Guinness Nigeria plc. operates under Diego Group a multinational beer and spirits company. The company produces five major brands: Guinness stout, Gorgon spark, Harp larger beer and Smim-off ice. International breweries is the third largest quoted brewer with a market capitalization of N14 billion (US & 93mm). The company largest or larger beer includes Trophy larger beer Champion breweries is the fourth largest brewer with market capitalization of N2.3 billion (US & 16M) market value. Becks beer is the company’s major beer.

The import of beer in bottle or cans for trade is prohibited in order to support domestic production. Companies engaged in brewing hop for the beer productions are legible for pioneer status entitling them to a tax holiday of up to seven years. Islamic Sharia law which bans the sale and consumption of alcohol in some of the Northern states of Nigeria is still in force (Bauchi, Sokoto, Borno, Zamfara, Kastina, Jigawa etc). Consumers can only consume alcohol in this state in the military facilities where they are sold. Military facilities are federal territory and this not subjected to the state law. As a result of this restriction, plants are relatively concentrated in the western and southern Nigeria where consumer market is freely accessible and less restricted by religions considerations.

Supply chain has been through key distributor key channel have traditionally being through Kiosks, provision stores, beer parlors, in that order. Aggressive innovations have been made to enhance beer availability to customers and deepen penetration. Breweries are now activating retail out lets and providing warehouse to distributors who enjoy preferential trade terms. While these, in addition to in-bar promotion, provision of chillers and cool boxes in strategic locations.

However, to understand branding, it is important to know what brands are. A brand is the idea or image of a specific product or service that consumers connect with, by identifying the name, logo, slogan, or design of the company who owns the idea or image.

On the other hands, branding is when that idea or image is marketed so that it is idea or image is marketed so that it is recognizable by more or more people, and identified with certain service or product when there are many other companies offering the same service or product. Adverting professionals work on branding not only to build brand recognition, but also to build good reputations and a set of standards to which the company should strive to maintain or surpass.

Branding is an important part of internet commerce, as branding allows companies to build their reputation as well as expand beyond the original product and service and add to the revenue generated by the original brand. Branding is also a way to build important company assets, which are a good reputation, branding can, help change that. Branding can build an expectation about the company services or products, and can encourage the company to maintain that expectation, or exceed them, bringing better product and services to the market place.

Finally, branding is the marketing practice of creating a name, symbol or design that identifies and differentiates a product from other products. An effect branding strategy gives your company a major edge in increasingly competitive markets. Your brand strategy is how, what, where, when and to whom you plan on communicating and delivering on your brand messages.

1.2 STATEMENT OF THE PROBLEM

Branding research has been investigated over the years and has intensified as product with similar attributes becomes more in the market place. Unfortunately however, among previous brand preference literature, there have been very few studies involving the product category of beer Woodside and Fleet JR (1979), Charlton and Enhrenburg (1973), Orth et al (2004). Much of the branding  research has been through probability models to test the impact of marketing mix variables as a predictor of brand preference and branding of beer consumers club et al (2004), Bents and Merunka (2000), Wagners and Taudes (1986). These variable (Referred in most of the research studies as the 4ps) are element such as product features, displays (advertising, sales promotion) availability (stock inventory and prices).

According to Wagnar and Taudes (1989), when used in probability modeling, marketing mix variables are non-stationary and heterogeneous among the population.

It is against this back drop that the researcher set out to discover the effect of branding on beer and the influence on consumers of such factor as advertisement the influence of situational variation in making a particular brand choice in the beer category. The researcher is also set out to determine the benefit of beer branding, the important of branding on beer and the strategies for effect good branding in beer.

1.3 PURPOSE OF THE STUDY

For the advancement of this study, the purpose or aim of this study is:

  1. To examine the effect of branding on beer production in Nigerian brewery Onitsha.
  2. To identify the benefit of beer branding on beer production.
  • To find out the important of branding on beer production.
  1. To ascertain the strategies for effective good branding on beer.
  2. To find out the effect of bad branding system on beer.

1.4 SIGNIFICANCE OF THE STUDY

There is growing interest in understanding how and why brand preference and choice very in the product category of beer. The study provides an in depth understanding for the effectiveness of branding on beer, dynamics and how it can help marketing managers and practitioners design marketing programmes that will evolve with their customers’ overtime or interest. The result of this study will contribute to the awareness of the relationship between branding, beer and customer and relationship between the identified factors (advertisement, peer group influence and situational variation of the customers) and brand preference in the beer category.

This study will form a basis of reference for marketing academics and practitioners in the subject of branding and brand preference.

1.5 SCOPE OF THE STUDY

This study is mainly limited to the effect of branding on beer in Nigerian brewery using Nigerian brewery Onitsha, Onitsha North Local government area of Anambra state.

1.6 LIMITATIONS OF THE STUDY

There is some setback that obstructed the progress of this research or study which include gathering materials like magazines, Text books and Newspapers. A lot of funds and time were needed to go beyond this very research work which the researcher could not have made.

Next to the above problems were high cost of materials and insecurity of lives and property in the society which made all needed professionals and academics and then views difficult. The assistance and criticism of those groups could not be trapped which would have greatly enriched this work more.

1.7 RESEARCH QUESTIONS

In order to guide this study, the researcher adopted the following questions:

  1. What is the effect of branding on beer production?
  2. Does a good branding activity promote beer marketing in Nigerian brewery Onitsha?
  3. Do you think that there is any benefit of beer branding on both producers and customers?
  4. Does a good strategy for effective good branding on beer promote beer market?
  5. What are the effects of bad branding system on beer market?

1.8 DEFINITION OF TERMS

For the purpose of this study, following terms were defined to guide the study;

BEER: This is alcoholic beverage produced by the saccharification of starch and fermentation of the resulting sugar. The starch and saccharification enzymes are often derived from malted cereal grains, most commonly in acted barley and malted wheat. Most beer is also flavored with hops, which add bitterness and act natural preservative though other flavoring such as herbs or fruit may occasionally be included. The preparation of beer is called brewing.

However beer forms part of the culture of beer drinking nations and is associated with social traditions such as beer festivals as well as a rich pub culture involving activities like pub crawling and pub games such as bar billiards.

BREWING: The process of making beer is known as brewing. A dedicated building for making of beer is called brewery, though beer can be made in the home and has been for much of its history. A company that makes beer is called either a brewery or a brewing company. Brewing beer is subject to legislation and taxation is developed countries, which from the late 19th century largely restricted brewing to a commercial operation only.

However, the UK government relaxed legislation in 1963, followed by Australia in 1972 and the USA in 1978, allowing home brewing to be a popular a hobby.

BRAND PREFERENCE: This is a measure of brand loyalty in which a consumer will choose a particular brand in presence of competing brands, but will accept substitutes if that brand is not available. Selective demand for a company’s brand rather than product, the degree to which consumers prefer one brand over another. The percentage of people who claim a particular brand is their choice.

BRANDING: Branding is defined as a “name, term, sign, symbol, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate than from those of other sellers. Branding is used to create emotional attachment to products and companies. Branding efforts create a feeling of involvement, a sense of higher quality and an aura of intangible qualities that surround the brand name, mark, or symbol.

 

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