EXTENT OF UTILIZATION OF E-COMMERCE BY SOFT DRINK MANUFACTURING COMPANIES IN ANAMBRA AND ENUGU STATES

ABSTRACT

This study was undertaken to determine the extent of utilization of e-commerce by Soft Drink Manufacturing Companies in Anambra and Enugu States of Nigeria.  Six research questions and six  null  hypotheses  guided  the  study.  The  study  adopted  a  survey  research  design  .Six components of e-commerce namely:  transaction server, Internet communication line, database and database server, web server, router and Client or workstation were studied.   The population for the study was comprised of 296 employees of the Soft Drink Manufacturing Companies from the two States.  No sample was taken due to the manageable size of the population.  A structured

82- item questionnaire with five response categories on the degree of utilization was used as instrument  for  data  collection.    The  instrument  was  validated  by  three  experts  from  the University  of  Nigeria,  Nsukka.  The  internal  consistency  of  the  questionnaire  items  was determined using Cronbach Alpha reliability method which yielded .50, .82, .76, .59, .78 and .82 for the six clusters respectively while the overall reliability coefficient of the instrument was .71. Copies  of  the  questionnaires  returned  were  280  constituting  95  percent  of  the  targeted population.  Mean and standard deviation were used to answer the research questions.  The six null hypotheses were tested using Analysis of Variance (ANOVA) statistic as they involved more than two groups in each case at 0.05 level of significance.  The result of the study revealed that while router component of e-commerce was  moderately utilized, all the other components of e- commerce were found to be utilized at low extent and very low extent leaving a far reaching implications for marketing education and Soft Drink Manufacturing Companies in Nigeria.   The result of the  null hypotheses showed that there was no significant difference in the mean ratings of the opinions of Marketing Managers, Sales Managers, IT Managers, Accounts Managers and Sales Representatives on the extent of utilization of Web Server and Client or Workstation with respect to their years of  experience in marketing of  the organization’s products and their educational qualifications. There was however, significant differences in the mean ratings of the opinions of Marketing Managers, Sales Managers, IT Managers, Accounts Managers and Sales Representatives on the extent of utilization of Transaction Server, Internet Communication Line, Database and Database Server and   Router components of e-commerce.  It was recommended among others that educational institutions offering marketing education should urgently review their curriculum contents to fall in line with current global practices.  This will help Lecturers to teach properly and the graduates to acquire the right knowledge and skills.

CHAPTER ONE

INTRIDUCTION                        

Background of the Study

There is a fundamental shift in the way business is conducted nowadays.  People are now moving rapidly away from a world in which national economies were relatively within a country and where there is no interaction with other countries to where the barriers to cross-border trade are crumbling and where perceived distance is shrinking due to innovations in transportation and telecommunication technology. Globalization, internationalization and the internet had greatly lowered  barriers  in  terms  of  trade,  politics,  economies  and  technology,  forcing  many organizations to either conform to modern trends of doing business or be left behind in their old ways and become extinct in no time. Globalization largely driven by Information and Communication Technology (ICT) is radically changing ways of doing things at home, school, in government and in business. This change has brought about a new method in buying and selling through the internet known as electronic commerce.

Electronic commerce (E-Commerce) is the buying and selling of goods and services over a variety of computer networks (World Trade Organisation, 2013 and Oborah, 2011).  Chaffey (2009) added that e-commerce is all electronically mediated information exchanges between an organization and its external stakeholders.   Osuala (2009) argued that many business leaders might think of e-commerce simply as the exchange of goods and services for payment over the Internet.  The author argued that e-commerce in its broadest sense, encompasses any commercial activity that takes place directly between a business, its partners or its customers through a combination of computing and communication technologies. E-commerce has become the most

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popular application in marketing, earning large revenues and forging a rapid growth in related technology.  Companies are now adopting social computing technologies that were designed for individual  use  (such  as  blogs,  wikis,  file  sharing  and  social  networks)  to  increase  the effectiveness and efficiency of their operations (Turban, King, Lee and Chung, 2008). Today, the ever-changing manufacturing company is more global than ever.

E-commerce is an innovation in Information and Communication Technology that is changing the way marketing is being conducted globally and is a driving force of the current globalization by ensuring that marketing activities take place with minimum barrier in terms of location and time.  Trepper (2000) emphasized that electronic commerce can be used to create brand equity and improve an organization’s public image, as well as to develop and strengthen direct  relationship  between  an  organization  and  its  customers,  distributors,  suppliers  and retailers. According to Owens and Beynon-Davies (2001), e-commerce is conventionally divided into  different domains such as Business to  Business (B2B), Business to  Consumer (B2C), Consumer to  Business (C2B) and  Consumer to Consumer (C2C) e-commerce. Business to Business Electronic Commerce is the use of Information and Communication Technology to facilitate payment management, inventory management and distribution management between business organizations. Business to Business e-commerce concentrates on supply chain and procurement issues. Business to Consumer Electronic Commerce on the other hand, involves online selling of goods to the final consumers.  The business offers a set of merchandise at given prices, discounts, shipping and delivery options. Consumer to Consumer e-commerce involves the online exchange of goods and services and information among consumers. E-commerce usually takes place at   B2B although individuals who are organizing events like burial ceremonies, naming ceremonies, parties etc engage in e-commerce by ordering for products

online and the products are delivered to them. E-commerce activities are carried out in organizations with the help of e-commerce technical components (Vaithianathan, 2010).   E- commerce technical components include Client or PC Workstation, Transaction Server, Internet Communication Line, Database and Database Server, Web Server and Router (Osuala, 2009 and Agomuo, 2005).    A workstation is  a  special computer designed  for  technical or  scientific applications  intended  primarily  to  be  used  by  one  person at  a  time.  They  are  commonly connected to a local area network and run multi-user operating systems. Transaction Server is a software component for e-commerce that is used in implementing business transactions.   It includes e-mail, Linkedin, Facebook etc (Osuala, 2009).   The duty of transaction server is to process business transactions according to the business transaction rules established by the organization.  The Transaction Server processes business transactions and is usually done using the Internet Communication Line.

Internet communication line is an e-commerce component that enables organizations to communicate with their  customers and other business partners.   It  is  a system for  linking computers around the world (Perrault and McCarthy, 2005). Internet is an enabling technology that helps an organization to exchange information with its business partners and customers. Another component of e-commerce is Database and Database server. Database stores detailed data about the operations of an organization. A database is an organized collection of data for one or more purposes, usually in digital form. A database server is a computer in a network dedicated to database storage.   Workstation in one organization is used to update data in a database server.  When the data is correct, the user tells the system to transmit the data via a Web Server.

A web server is used to transmit data.  It can be referred to as either hardware or the computer application    that helps to deliver content which can be used to access information through the internet. The Web Server transmits the data over the Internet to another organization via the router.   A router is a device that forwards data packets (units of information) from one network address in each transmission and make a decision on how to send it based on the most expedient route determined by traffic load, line cost, speed and bad lines (Trepper, 2000). Many organizations utilize these e-commerce components since the race for survival in business in this digital age  is  defined  by the  effective  and  efficient  utilization of e-commerce components (Oborah, 2011 and Kotler, 2004).  In this study, the use of e-commerce components refers to the utilization of e-commerce for business and marketing activities.

Utilization connotes the use of an item, idea or object to solve a problem or to achieve an objective.  To utilize, according to Hawkins (2005), is to find a use for something. The utilization of e-commerce components has brought a new trend in the concept of marketing.   Global marketing realities indicate that the extent of utilization of e-commerce determines successful marketing in today’s internet-driven marketing environment.   The failure of organizations to embrace e-commerce could result  to lack of business expansions, poor revenue generation, inability to create more jobs for the unemployed and above all closure of businesses like Nigeria Mineral Water Onitsha (Oborah, 2011 and Iddris, 2012). This confirmed the views of Owens and Beyon-Davis (2001) and Ogunyemi (2006) that the general level of utilization of e-commerce is not only low in some parts of   developed   and   developing countries.   E-commerce is utilized by soft drink manufacturing companies.

Soft Drink Manufacturing Companies are those companies that manufacture soft drinks or beverages without alcoholic content.  Soft drink manufacturing companies in Nigeria include:

Seven-up Bottling Company Nigeria Plc, Nigeria Breweries Plc, Nigeria Bottling Company Limited,  and  Intafact  Beverages  Nigeria  Limited.  The  products  of  the  companies  include Maltina, Amstel Malta, Guinness malt, Malta gold, Grand malt, Coke, Sprite, Mirinda, Fanta, Schweppes Bitter lemon, Savanna Apple drink, Pepsi, Soda Water, Maltex, Beta Malt, Mountain Dew and Five Alive. Many of these soft drink manufacturing companies are located in Enugu and Anambra States.  These companies may utilize e-commerce in marketing of their products through different categories of employees. For the purpose of this study, these employees include Marketing Managers, Sales Managers, Information Technology (IT) Managers, Accounts Managers and Sales Representatives.

A Marketing Manager is one who creates value for customers and build strong customer relationships in order to capture value from customer in return. Marketing Managers plan the best ways of promoting their organizations’ products, services or message to as many people as possible (Kotler, 2004). The Marketing Manager’s aim is to find, attract, keep and grow target customers by creating, delivering, and communicating superior customer value. The Marketing Manager also researches and analyses market trends and also manages a team of marketing executives and assistants. The study considered this category of employees because e-commerce involves on line marketing activities engaged by Soft Drink Manufacturing Companies through electronic applications.

Similarly, a Sales Manager on the other hand, is concerned with managing personal selling (Perrault and McCarthy, 2005).  The Sales Manager is in charge of the sales unit of any organization  with  full  accountability  for  results  and  people  whilst  advancing  the  service standards of the organization and abiding by organization policy. Sales Managers are relevant for

e-commerce utilization in Soft Drink Manufacturing Companies. Apart from Sales Managers, IT Managers are also relevant in utilization of e-commerce in soft drink manufacturing companies.

The  IT  Managers  are  responsible  for  selecting  hardware  and  software  products appropriate for an organization, integrating these products with organizational needs and infrastructure, and installing, customizing and maintaining those applications for the organization’s computer users (Kotler and Armstrong, 2005). The IT Managers are relevant in this study because they perform network administration, software development and installation, and the planning and management of Soft Drink Manufacturing Companies technology life cycle, by which hardware and software are maintained, upgraded and replaced.

Accounts Managers are in charge of all organization’s financies, recording all forms of payments  or  transactions  made  in  the  organization  (both  cash  and  electronic).  Accounts Managers have a stake in any company’s success or failure and at all times are poised to assist, advise, provide support, or withdraw it (Perrault and McCarthy, 2005).   Accounts Managers occupy key positions in the Soft Drink Manufacturing Companies as these Managers take care of the revenues and cost activities of the companies. Accounts Managers are considered in this study based on the fact that these Managers handle all on line monetary transactions in e- commerce utilization in Soft Drink Manufacturing Companies.   Apart from these Managers, Sales Representatives are also involved in the utilization of e-commerce in marketing of products of soft drink manufacturing companies.   The Sales Representatives are those employees that personally contact and secure new business account/customers and coordinate sales effort with Marketing Managers, Sales Managers, Accounts Managers and IT Managers.

The Sales Representatives of an organization help the organization to achieve maximum sales profitability, growth and penetration within an assigned territory and/or market segment by

effectively selling the organization’s products and/or related services (Kotler and Armstrong,

2005).   Apart from these managers, there are other demographic variable such as experience and educational qualifications that  also  aid the  managers in their daily business and  marketing operations in organizations. Experience refers to the knowledge and skill that one possesses through doing something for a period of time (Hornby, 2001).   These knowledge and skills gained over time influence the way one thinks and behaves. Employees of Soft Drink Manufacturing Companies have various experiences depending on their years of working in the companies and the more the experience, the more efficient they become in performance of their duties.

Another demographic variable considered in the study is educational qualification.  This refers to the achievement of individuals in the acquisition of learning experience and is often certificated at the end of such achievement. Acquisition of educational qualifications attests to the fact that the individuals who acquired such qualifications have been to school over a period of time and have acquired some knowledge and skills. Marketing Managers, Sales Managers, IT Managers, Accounts Managers and Sales Representatives in Soft     Drink Manufacturing Companies, therefore, possess classes of degrees and certificates which include First degree, Masters Degree, Doctoral degree and Professional Certificate. The level of qualifications of the managers can help them in the way they think, solve problems and relate with others in the organization of the company, irrespective of which state they are located.

Anambra and Enugu States are chosen for this study because the two States have the highest number of Soft Drink Manufacturing Companies (one and three respectively) in the south Eastern States as against the other three States with less number of or without any Soft Drink Manufacturing Companies. For instance, Imo State has only one, Ebonyi State has none

and Abia State has none. Anambra State has one Soft Drink Manufacturing Company (Intafact Beverages Limited) and large Business Districts and Mega Depots of other Soft Drink Manufacturing Companies.   Onitsha is the commercial nerve centre of Anambra State and is strategically located with bulk of the marketing of these soft drinks. These two States take the lead in the production and marketing of soft drinks in the South East of Nigeria and hence their choice for the study.

A preliminary study was carried out by the researcher to determine whether e-commerce is in use in the Soft Drink Manufacturing Companies in the two states.  The study revealed that e-commerce is  in  use  in  the  Soft  Drink  Manufacturing Companies especially to  exchange information on the internet with their business partners like e-mail and web.  However, it was observed that soft drink manufacturing companies are experiencing low sales, mismanagement of  funds,  ineffective  and  inefficient  marketing  of products  and  loss  of global  profitability (Oborah, 2011).  There  is  uneven distribution of soft  drinks  in  the  states especially  in  the hinterland. This creates artificial scarcity of products especially during festive periods. Most often, this situation leads to price increase. It is therefore expected that determining the extent of utilization of e-commerce by Soft Drink Manufacturing Companies will address these issues. Hence, the need to explore the extent of utilization of e-commerce components by Soft Drinks Manufacturing  Companies  in   Anambra  and   Enugu States.

Statement of the Problem

E-commerce is one of the innovations which have brought fundamental changes in the traditional  market  and  marketing.  E-commerce  affects  every  aspect  of  how  business  is conducted. E-commerce is redefining the business landscape as it offers a new paradigm to businesses, thus having the potential of enriching a  business venture and creating  business

values.  E-commerce enhances  global  reach,  reduces  cost  of operation,  increases  sales  and improves supply chain, and customer service relationship. These potentials have become strong motivations for the utilization of e-commerce by organizations all over the world.

Many organizations in Nigeria such as banks, oil companies and manufacturing companies, have adopted e-commerce in their business operations. This is because the quest for survival  in  business  in  this  digital  age  is  determined  by  the  utilization  of  e-commerce components. Business organizations have understood that to be competitive in today’s marketplace, such organizations should effectively utilize e-commerce in their business and marketing activities (Akintola, Akinyede and Agbonifo, 2011).

However, irrespective of various organizations’ adoption of e-commerce, it has been observed that many soft drink manufacturing companies are losing competition in favour of their contemporaries in  today’s globalized  economy.  Many of them  are  experiencing  low  sales, leakages, and mismanagement of funds, wastages and at times loss of products as a result of ineffective and inefficient marketing of product (Oborah, 2011).

Many intermediaries are involved in the channel of distribution of soft drink manufacturing companies’ products and this adversely makes the prices of the products to be exorbitant. With the exorbitant prices, consumers resort to buying cheaper or adulterated soft drinks and other beverages which they can easily place order and make payments online and the products delivered at their doorsteps no matter the quantity requested and location of residence. It has also been observed that there is uneven distribution of soft drinks especially in the hinter land. Online ordering and payment of products are done only by distributors, thus, leading to creation of artificial scarcity of the products especially during festive periods thus making of marketing operations of the soft drink manufacturing companies to be ineffective and inefficient.

Again, it has been observed that some customers still place order and make payments for soft drinks through sales representatives instead of using bank channels and electronic platforms, and this most often make the companies to experience loss of revenue as the Sales Representatives at times divert the fund and end up giving excuses to the customers that the products are not available at the time of request. These funds are delayed before they are paid into the organization’s accounts or at times are totally mismanaged or not accounted for thus leading to the loss of revenue. The products are sometimes delayed before they are supplied, thus,  making their  marketing operations to  be  ineffective and  inefficient and  losing  global profitability. These products most times are lost while on transit resulting to colossal loss.  Based on the above stated facts, this study therefore, was aimed at determining the extent of utilization of e-commerce by soft drink manufacturing companies in Anambra and Enugu States.

Purpose of the Study

The major purpose of the study was to determine the extent of utilization of e-commerce by Soft Drink Manufacturing Companies in Anambra and Enugu States of Nigeria. Specifically, the study sought to determine the extent to which:

1.  transaction server is utilized by soft drink manufacturing companies in Anambra and

Enugu States;

2.  internet  communication  line  is  utilized  by  soft  drink  Manufacturing  companies  in

Anambra and Enugu States;

3.  database  and  database  server  is  utilized  by  soft  drink  manufacturing  companies  in

Anambra and Enugu States;

4.  web server is utilized by soft drink manufacturing companies in Anambra and Enugu

States;

5.    router is utilized by soft drink manufacturing companies in Anambra and Enugu States;

6.  Client or PC Workstation is utilized by soft drink manufacturing companies in Anambra and Enugu States.

Significance of the Study

The findings of this study would be beneficial to soft drink manufacturing companies, curriculum planners, the government, business educators, consumers and researchers.

The findings of this study would be of immense benefit to soft drink manufacturing Companies as the findings would provide strategic information on marketing of products to the companies. Management of the companies would use the information so provided by the study to plan and improve their products and customer-oriented service delivery.  Prospective soft drink manufacturers would use the findings as reference materials to equip themselves with the desired e-commerce marketing tools before venturing into soft drink manufacturing.   Soft drink manufacturing companies would also utilize the e-commerce components to ensure an up-to-date tracking  of  development  in  global  soft  drink  marketing.  The  findings  would  also  add  to marketing literature which will be useful to future researchers in the field of marketing and e- commerce.

The findings of the study would be beneficial to curriculum planners as the findings are expected to open a new horizon in marketing education. The findings would provide content for curriculum enrichment in institutions of higher learning in Nigeria. The findings of the study would be utilized by curriculum planners (National Universities Commission, National Board for Technical Education and National Commission for Colleges of Education) for review and update of curriculum in business education especially with regards to integration of e-commerce in marketing education.

Government would also benefit from the findings of the study as it would expose the real situation with the e-commerce driven business. Government would use the findings as the basis for investment into and acquisition of Information Technology infrastructure.

The  findings of the study would be of great  benefit  to  consumers as the use of e- commerce by the companies will help in delivery and the consumers would be able to negotiate order from anywhere and anytime.

The findings of the study would be of immense significance to researchers who may want to continue research on other aspects of e-commerce. It is expected that the findings will give clue to the trend in contemporary marketing especially in the use of e-commerce.  Researchers would  also  use  the  findings  to  increase  their  literature  in  their  further  research efforts  in marketing studies and practices more especially in relation to e-commerce.

The findings of the study will be theoretically significant as it would form the basis upon which organizations adopt e-commerce as innovation in marketing of their products with its advantage over brick and mortar marketing. It would also form the basis for organizations to acquire  state-of-the-art  on  e-commerce  components  to  enable  them  achieve  competitive advantage over others.

Research Questions

The study answered the following research questions:

1.  To  what  extent  is  transaction server  utilized  by soft  drink  manufacturing companies in

Anambra and Enugu States?

2. To what extent is internet communication line utilized by soft drink manufacturing companies in Anambra and Enugu States?

3.  To  what  extent  is  database  and  data  base  server  utilized  by  soft  drink  manufacturing companies in Anambra and Enugu States?

4. To what extent is web server utilized by soft drink manufacturing companies in Anambra and

Enugu States?

5. To what extent is Router utilized by soft drink manufacturing companies in Anambra and

Enugu States.

6.  To what extent is PC workstation utilized by soft drink manufacturing companies in Anambra and Enugu States?

Hypotheses

The following null hypotheses were tested at 0.05 level of significance:

Ho1: There is no significant difference among the mean ratings of Marketing Managers, Sales Managers, IT Managers, Accounts Managers and Sales Representatives on the extent of utilization of transaction server by Soft Drink Manufacturing Companies in Anambra and Enugu States.

Ho2: There is no significant difference among the mean ratings of Marketing Managers, Sales Managers, IT Managers, Accounts Managers and Sales Representatives on the extent of utilization of internet communication line by Soft Drink Manufacturing Companies in Anambra and Enugu States.

Ho3: There is no significant difference among the mean ratings of Marketing Managers, Sales Managers, IT Managers, Accounts Managers and Sales Representatives on the extent of utilization of database and database server by Soft Drink Manufacturing Companies in Anambra and Enugu States.

Ho4: There is no significant difference among the mean ratings of Marketing Managers, Sales Managers, IT Managers, Accounts Managers and Sales Representatives on the extent of utilization of Router by Soft Drink Manufacturing Companies in Anambra and Enugu States.

Ho5: There is no significant difference among the mean ratings of respondents with respect to their years of experience (1-5, 6-10 and 11+ years) on the extent of utilization of Web Server by Soft Drink Manufacturing Companies in Anambra and Enugu States.

Ho6: There is no significant difference among the mean ratings of respondents with respect to their qualifications on the extent of utilization of PC workstation by Soft Drink Manufacturing Companies in Anambra and Enugu States.

Scope of the Study

The study was delimited to utilization of electronic commerce (e-commerce) by soft drink manufacturing companies. Specifically, the study focused on the six components of e- commerce namely PC Workstation, transaction server, internet communication line, database and database server, web server and router. The opinions of managers, their educational qualification and years of experience, were used to accomplish the objectives of this study. The four Soft Drink Manufacturing Companies in Anambra and Enugu States namely Seven-up Bottling Company Limited, Nigerian Bottling Company Limited, Nigerian Breweries Plc. and Intafact Beverages Limited were studied to determine the extent e-commerce is utilized in their operational and marketing activities.

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