The Influence of Brand Extension Strategy on Marketing Performance of Soft Drinks Bottling Firms in Nigeria

Abstract

This study observed that since the recession of 1990s many firms have lost loyal customers, due to firms’ inability to keep up with ever changing preferences and tastes of customers. As a result, many brands are now out of existence. The soft drinks industry appears not exempted, due to cases of consumer switching especially, when changes in tastes and preferences are no longer cared for by specific product brands. This study therefore surveyed the effect of brand extension such as Product Category similarity, on marketing performance metrics of sales volume, sales growth and profitability. A total of 98 copies of questionnaire were administered among Commercial Managers, Marketing Managers, Sales Managers and Sales Leads in proportion to the selected firm’s target population studied. Analysis of the data through the use of descriptive tables and Pearson Correlation Coefficient of the SPSS package, shows that a significant percentage of the total soft drinks products sold on annual bases belong to the extended brands of the parent products. The study therefore concluded that the combined influence of Product Category similarity such as fit perception; does provide strong leverage to firms’ overall marketing performance. It was therefore recommended that provided firm’s core brands are shielded from image-dilution, firms should continue to infuse fit perception of core brands on extended brands tailored to provide bundles of extra solution to demand, to accommodate all categories of consumers, and thus maintain corporate relevance while making profit through sustained growth rate of sales.

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