A STUDY ON THE PROBLEMS AND PROSPECTS OF MARKETING INDUSTRIAL PRODUCTS IN

ENUGU STATE

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

This research work is on the topic: problems and prospects of marketing   industrial products in Nigeria. This work is centered on some selected production companies in Enugu metropolis. The researcher decides to use Emenite Nigeria Limited, Alo Aluminum and Ozomac Company as her case study. These manufacturing companies specialized in the production of roofing materials and other building materials. These companies are located in Enugu urban of Enugu State. Emenite Nigeria Limited is located in Emene industrial Layout Enugu. Alo Aluminum Company is located along Abakaliki expressway Emene Enugu while Ozamac Construction Company is located at Trans Ekulu Enugu. Emenite is a franchise firm that is owned by Etex group. This company has its corporate headquarters in Belgium. Emenite uses 60% of local raw materials in its production. At its conception, the company was nothing but only a roofing sheet factory.  The prevailing situation now is from a mere roofing sheet industry to a fully building materials manufacturing company. The Alo Aluminum and Ozomac construction companies are Indigenous companies. They make use of 100% local raw materials in their productions. They started as mere roofing sheet companies, before they fully graduated into building material production companies.

These companies have their distributors located in some places in Enugu. These companies facilitate their performance with good distribution channel, availability of genuine products and efficient after sales services.

EVOLUTION OF MARKETING

        Marketing is   an old and a new profession. Marketing is old in the sense that, since the beginning of man, exchange or trade has been in existence.

        The advent of barter system coupled with the concept of division of labour and the ensuring of specialization gave rise to the production of surplus.

People started making more than they need of certain products, so trade (change), which is the heart of marketing became inevitable. Marketing started evolving in earnest when small producers began to manufacture their goods in large quantities in anticipation of future orders, middlemen with their institutionalized channels then appeared on stage to facilitate the communication  of  buying and selling of the resultant increased output. The desired impetus was given marketing by the industrial revolution, which brought with its mechanization and consequent search for mass marketing.

The newness of the course marketing, lies in the fact that marketing is now scattered in such fields as selling advertising, pricing, production, design packaging, branding and physical distribution. These areas are major concern of marketing.

The advent of specialized sales department helped to a considerable extent in resolving the organizational predicament of market expansion. There was problem of communicating with the customers, but manufactures were compelled to shift certain marketing functions to the middlemen. Initially goods and services were sold to retailers, who eventually resold them to final customers.

INDUSTRY AND MANUFACTURING BACKGROUND

The history of Industrial development and manufacturing in Nigeria is a classic illustration of how a nation could neglect a vital sector through policy inconsistence and distributions attributed to the discovery of oil. The near total neglect of agriculture has denied manufactures and industries their primary source of raw materials. The absence of locally sourced inputs has resulted in low industrialization.

        Today, the Nigerian industries and manufacturing sector account for less than 10% of Nigerian's GDP, with manufacturing capacity utilization remaining below 35% for the most part for the cast decade.

Players in the Nigerian industrial and manufacturing sector can be classified into four groups; multinational, national, regional and local. Apart from the multinational operators, most of the players have disappeared in the last two decades, due to unpredictable movement policies, lack of basic raw materials most of which are imported.

Some of the constraints faced in this sector Include:

§  High interest rates

§  Unpredictable government policies

§  Non-implementation of existing policies

§  Lack of effective regulating agencies

§  Infrastructural inadequacies

§  Dumping of cheap products

§  Unfair tariff regime

§  Low patronage

Globalization and liberalization pose challenges to the Nigerian industrial sector. The impact of these global protections, increase focus on product quality and increase expenditure on research and development. The prospects of manufacturing in Nigeria are bright given the nations nascent democracy, a market size of over 120 million people, rich mineral and other resources size of the West African market as well as cheap and abundant labour. Developing Nigeria’s industrial sector requires the concerted efforts of government and the private sector to create an environment that would encourage investments, primarily by Nigerians as firm basic for attracting and sustaining foreign investment in the sector. A fully developed industrial sector world provides a firm basis for sustainable economic growth and development.

The most pronounced objectives of most business ventures is profit making. This objective is achieved when the products and services get to the final users or customers at the right place right time and right price. The reason is that firms depend on the customers for the sale of their products. Marketers are no longer in doubt as to whether their products are needed in the market place, but are interested in knowing the problems that associate with the marketing of industrial products. The study of problems and prospects of marketing industrial products allows marketing managers to develop an insight into what lies behind the problems and prospects of marketing industrial products in Nigeria. Also knowing the cause of the problems and solutions are important.

Firms in building material industry like Emenite, Aluminum and Ozomac construction companies etc. want to know those problems that associate with marketing of industrial products. The pressing need and task facing the manufactures and marketers of industrial products is to find out the factors or variables that exert the greatest problem in marketing industrial products.

1.2   STATEMENT OF THE PROBLEM

In the contemporary marketing environment, it has always been a difficult task to identify exactly the factors that pose problems in marketing industrial products. Most marketers have paid attention to factors which in their own estimation determine as the cause of the problems without giving due consideration on how to solve those problems. The reason is that, marketing plans designed for a particular product of industry failed to attain the desired and targeted result.

The basic problem here is to know how these problems affect industrial products in the market place:

·                    Unorganized marketing system.

·                    Product adulteration

·                    Lack of effective marketing information system.

·                    Unpredictable government policies.

·                    Price instability.

·                    Lack of effective regulatory agencies.

·                    Poor management.

Absence of good market research competition from imported products.

Based on this, the following research questions need to be answered.   

1.3   RESEARCH QUESTIONS

Has the problem of unorganized marketing   any impact on the marketing of industrial products?

If yes, to the above question, then what should marketers of industrial products do to reduce this problem?

1.4   OBJECTIVES OF THE STUDY

        Every marketing plan has objective which it targets to   achieve. Most times the stated objectives are not achieved. In view of this, the question remains – are they other factors beside   the factors stated in the statement of the problem that influence marketing of industrial products.

        The objectives of this study are:

1.          To evaluate how organized marketing system   affect marketing of   industrial products.

2.          To identify the most suitable distribution channel for industrial products

3.          To establish adequate market research

4.          Establish good marketing information system.

5.          To make necessary recommendations, in view of the findings.

1.5   THE SIGNIFICANCE OF THE STUDY

In accordance with the modem stipulation  of effective application of promotional tools supplement an organizational effort in the achievement of certain marketing objectives, which the development of the brand/product as well as complementing other parameters of the marketing mix. To this regards, this study is meant to throw more light on the marketing of industrial products in Nigeria. The topic of this research is important to the revamping of the Nigerian economy. The importation of industrial products into the country is contributing to the galloping inflation, we are witnessing today because it draws us down to deficit in our economy.

1.6  RESEARCH HYPOTHESES:

In the course of this research, the following hypotheses where were formulated based on the research questions and objectives. The hypotheses were tested in the research work.

1.     Prices of industrial products   have significant         impact           on the marketing of industrial products.

2.     Product preference has strong influence on the       marketing of industrial.

3.     Lack of adequate marketing communication   hinders effective marketing of industrial   product.

1.7   SCOPE OF THE STUDY

This study is confined to only three production companies in Enugu metropolis. This means that the empirical study covered only to the staff of these companies, and their distributors. This limited scope is not withstanding, it is hoped that the finding which may generate from the study will be useful to both the staff of these companies and students, who intended to undertake marketing as a profession.

1.8   DEFINITION OF TERMS

Marketing strategic planning: Is the process that selects and directs the entire action of the marketing organization within the policy guideline to achieve the objectiveness and goals of the firm.

Physical Distribution: The tasks involved in planning and implementing the physical flow of materials and final goods from points of origin to points of use,  to meet the needs of customers at a profit.

Producer Markets: The set of organizations that buy products for the purpose of using them in production process to make profit or achieve other objectives.

Organization marketing: Those activities undertaken to create, or alter attitudes and/or behaviour of target audiences toward particular organization.

Merchant Middlemen: Business firms such as wholesales and retailers that buy, take little to and resell merchandiser.

Marketing system: A set of interacting participants, markets, and flows that are involved in an organized arena of exchange.

Marketing channel: A method of organizing the work that to be done to move goods from producers to users.

Harvesting strategy:  A marketing strategy in which the firm sharply reduces its expenses to increase its current profits, knowing that this will accelerate the rate of sales decline and ultimate demise of the product.

Distribution structure: All available arrangements in a particular industry to get products from the producers to the users.

Containerlization: The putting of goods in boxes or trailers that can easily be transferred between two or more modes of transportation.

Evoked Set: The set of alternatives that the buyer might or did consider at that stage of the decision process.

Closed and question: A question in which the possible answers are supplied.

Functional Marketing Organization: A form of marketing organization in which the various marketing functions are headed by separate managers who report to the marketing vice president.

Macro environment: The totality of major institutions and forces that are external and potentially relevant to the firm.

Open-end-question: A question that the respondent is free to answer in his or her own words.

Market Potential: The limit approached by market demand as industry marketing expenditure goes to infinity, for a given set of competitive prices and a given environment.  

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