Effectiveness of Product Strategy in the Kenyan Beverage Industry

Abstract

This study was conducted between April and September, 2004. The population of interest included all the beverage industry firms in Kenya. The Kenyan Beverage industry was classified into two categories and the sample was drawn from these categories which were: Alcoholic beverage industry and Non-alcoholic beverage industry. A frame work of 50 beverage firms was used in this study (see appendix 3). The study was statistical with two major objectives mainly: To determine which aspects of product strategy managers in the Kenyan beverage industry consider being effective in realizing product strategy objectives and to identify the factors that affect the use of product strategy in the beverage industry. A structured Questionnaire was used to collect data (see appendix 2). The findings were as follows: All the aspects of product strategy as studied in this research were found to be of great importance towards achieving effective product strategy objectives, for most of the firms which participated in this research. All the aspects scored a mean of above four and this clearly indicated that they were all- important. From the study, effectiveness of packaging purposes scored mean scores of 4.95, 4.80, 4.60 and 4.09 for maintaining quality, Aesthetics, customer satisfaction and value adding purposes respectively. The mean scores for customer satisfaction, customer loyalty, profitability margins and corporate image purposes were 4.91, 4.84, 4.16 and 4.54 respectively with respect to effectiveness of product quality purposes. With regards to effectiveness of Branding purposes, the mean scores for customer satisfaction, customer loyalty, customer awareness and quality V!e!e 4.91, 4.64, 4.77 and 4.86 respectively. (See tables 4, 6 and 8). The second objective looked at the factors affecting the use of particular product strategy. From the research, the factors affecting the use of market leader strategy were market share, cost of production, sales turnover, product quality and profitability margins with proportions of 65.9%, 1.1%, 54.5%, 36.4% and 65.9% respectively (see table 11). The proportions affecting leadership challenging strategy were 25.0%, 20.5% 52.3% and 31.8% for product quality, packaging, competition and organization behavior respectively (see table 12) product following strategy was mainly affected by sales turnover, production capacity, Cost of production, life cycle stage, threat of product substitute and product differentiation with proportions of 3.2%, 56.8%, 65.9%, 29.5%, 34.1% and 34.1 % respectively. For Me-too strategy, the factors affecting its use were image, competition and cost of production with proportions of56.8%, 45.5% and 22.7% respectively (tables 13 and 14). As seen from the study, all the attributes researched were of great importance and hence it is highly recommended that organizations should enforce these attributes towards achieving effective product strategy.