THE EFFECT OF PRODUCT QUALITY ON CONSUMER BRAND LOYALTY
(A CASE STUDY OF 7UP BOTTLING COMPANY ABA)
This research work empirically examines the effect of product quality on consumer brand loyality with particular reference to seven 7up bottling company Aba. The paper carefully examines the concept of product quality as a tool for consumers brand loyality. Questionnaires were drawn and administered to manufacturing personnel of 7up bottling company consumers of 7up products in Aba. Population of 400 was drawn and a sample size of 50% of the population (200) was employed. Analyzing the answer giving from the research question and testing hypothesis with the chi-square are statistical techniques the researcher work therefore concluded from the summary that quality product have positive effect on consumer’s brand loyality and product quality increase the demand of 7up product by the consumers. The paper made some finding which include product quality insure repeat purchase of a product which leads to consumer’s brand loyality. The conclusion drawn from finding include, the management of 7up bottling company should lay more emphasis on product quality in order to gain consumer’s brand loyality in there organization. Base on the deduction made from the finding recommendation is therefore, company should always remain focused on product quality in order to ensure consumer brand loyality.
TABLE OF CONTENTS
1.1 Background of the study
1.1 profile of the 7up seven company plc ABA
1.2 Statement of the problem
1.3 objective of the study
1.4 Research questions
1.5 Research hypothesis
1.6 Significance of the study
1.7 scope and limitations of the study
1.8 Definition of terms
REVIEW OF LETERATURE
2.1 The product concept
2.1.1 Meaning of product
2.1.2 types of product
2.1.3 levels of product
2.2 product quality
2.2.1 total quality management (TQM)
2.3 An overview on brand
2.3.1 Benefits of branding
2.3.2 brand strategy
2.4 brand loyality
2.4.1 factors influencing brand loyality
2.5 brand equity
2.6 the effect of product quality on consumer
3.2 Research design
3.3 Population of the study
3.4 Area of the study
3.5 sample and sampling techniques
3.6 Method of data analysis
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
4.1 Analysis research questions
4.2 Test of hypothesis
4.3 Discussion of findings
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Restatement of the problem
5.2 Summary of the findings
5.5 Suggestions for further studies
1.1 BACKGROUND OF THE STUDY
The changes in the Income of consumers and Improvement in their standard of living with increasing choice of people, have led to the development of marketing opportunities and product quality development in the business s world. In a bid to satisfy the consumers, producers, develop new products to meet the changing needs of the consumes. But a the market grows and expands, especially, due to the presence of numerous competitors, the need for product quality becomes an utmost concern to organizations in order to retain and attract consumes.
Product quality and development is an important function of business enterprises. This is because products that were satisfactory to consumers yesterday might not be satisfactory to them today.
Furthermore, if the product quality is satisfactory to consumer the product is likely to command higher profit margin and consumer brand loyalty. In the past, many company’s took customers for granted because the customer may not have had alternative sources of supply or the market was growing so fast that the company did not worry about satisfying and retaining its customers, neither are they concern on developing product quality. This is not longer the case; things have changed in today’s marketing environment.
Kotler (1999): noted that today’s customers are harder and difficult to please. They are smarter, more price and quality conscious, more demanding, less for giving and they are been approached by more competitors with equally or better offers.
Thus, The challenges in today’s market is on product quality in order to retain and maintain consumers loyalty on our product.
Company to study the effect of its product quality in retaining and maintaining consumer loyalty on her various brands of product.
1.1.1 PROFILE OF SEVEN7 UP BOTTLING COMPANY PLC, ABA
The chairman of Seven Up Bottling Company came to Nigeria in the year 1929 on October 1st 1960 at Ijora Lagos and grant total of fourteen cases of Seven up drinks the same day and was at Ibadan in 1981, another one in 1980 at Aba, 1989 at Kaduna and finally in Benin 1994.
The Aba Plant which was opened 1980 is located at Ogor-Hil, Seven up bottling Company Plc bottling company Plc deal on soft drinks such as Seven up ,Pepsi Cola, Mirinda, Mountain Dew, Mirinda Soda, Team lemon etc.
The Plant has more than five hundred (500) employees which include male and females workers.
1.2 STATEMENT OF THE PROBLEM
7Up Bottling Company is noted as one of the major soft drinks producers in Nigeria, marketing various brands ,such as Pepsi, 7u,Mirinda, soda water, Mountain dew, and Teem. In spite of all these range of products, the company has not yet made the mark as the leader in the soft drink Industry in Nigeria.
In an oral interview with some staff and distributors of seven up bottling company, we noted that Nigeria Bottling company prodders of the famous coca-Cola remains the market leader of soft drink Industry and major competitors of 7 up bottling company.
The emergency of other soft drink producers, such as Faroz, Limca etc has compounded the problem of 7up co-operate goal to be the market leader in the soft drink Industry. In an interview with some distributors of 7up bottling company, we noted that the major problem of 7up bottling company is the existence of competing brands especially coca-cola which is regarded to be of higher quality by some consumers than 7up product. In other words, this study would attempt to find out if consumer brand loyalty is based on product quality or not.
1.3 OBJECTIVES OF THE STUDY
Great Importance has been attached to product quality in retaining and maintaining consumer’s loyalty. In view of this, this study is aimed at:
i. Evaluating the effect of product quality in retaining and maintaining consumers brand loyalty with a special emphasis on 7up bottling company, Aba.
ii. Examining the effect of product quality on the demand of 7up products.
iii. Deterring the acceptability of product quality as an important marketing strategy adopted by the company.
iv. Making some recommendations towards the profitability of product quality as a strategy in retiring and gaining market share in the midst of severe competitions.
1.4 RESEARCH QUESTIONS
In carrying out this research, some research questions will be answered and this research questions will aid in formulation of the hypothesis. The questions are as follows:
i. Dos product quality have a positive effect on consumer brand loyalty?
ii. Does product quality increase the demand of a product?
iii. IS product quality always embarked upon when there are severe competitors in the market?
1.5 RESEARCH HYPOTHESES
In the course of this study, the following hypotheses will be tested.
Ho1: product quality does not have any positive effect on consumer brand loyalty.
HA1: Product quality has positive effect on consumer brand loyalty.
HO2: Product quality does not increase the demand o a product by the consumer.
HA2: product quality increase the demand of a product by the consumer.
HO3: product quality is not always embarked upon when there are severe competitors in the market.
HA3: Product quality is always embarked upon when there is severe competition in the market.
1.6 SIGNIFICANCE OF THE STUDY
The importance and benefits to be derived from this study are enormous and are outlined below:
1. This study prepares me for the tasks ahead in deterring the effect of pro duct quality on consumers brand loyalty.
2. This study is important to me because it serve as a partial fulfillment of the requirements for the award of higher National Diploma (HND).
3. This study would assist companies especially the 7up Bottling company to examine the cost involved and the benefits derived from product quality in order to ascertain if they should continue with the strategy of product quality in order to gain consumer’s brand loyalty and a larger marketer share in the soft drink industry.
4. This study is designed to find out or ascertain what parentage of the consumers are buying 7up product as a result of its product quality.
5. It is hoped that the result of this study will encourage manufacturers and institution that might not have used product quality cum product development as a strategy or tool to gain consumer brand loyalty to do so.
6. This study will be beneficial to individual, business organizations, Institutions, manufacturers, and government officials etc who wish to know the effect of product quality on consumer brand loyalty.
7. This study will serve as a source of secondary data to researcher in field of product quality, product development and consumer behaviour.
1.8 DEFINITION TERMS
7UP BOTTLING COMPANY: A legally register business s name licensed to produce soft drinks in Nigeria.
ABA: A commercial Town in Abia State of Nigeria.
BRAND: A name, term, sign, symbol, design or combination of these, intended to identify the goods or services of one seller or group of seller and to differentiated them from those of competitions.
BRAND LOYALTY: The feeling of trust and satisfaction that make a customer always buys the same brand of product.
CASE STUDY: A true or invented business situation used in business training to practice decision making.
COMPANY: legally registered Business ventures
CONSUMER: A person or company who buys and uses goods and services.
EFFECT: A result of something
PRODUCT: Anything that can be offered to a market for attention, acquisition , use or consumption that might satisfy a want or need.
QUALITY: What something is like or how good or bad a product is.
CO-OPERATE GOAL: Top management set objective/target.
MARKET SHARE: The percentage of a total market which the sales of a company product cover.
INDUSTRY: A group of companies making the same type of product or offering the same types of services.
PROMOTIONAL TOOLS: materials used in promotion e.g display material and sales literature.
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