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EFFECTS OF PRODUCT PACKAGING ON SALES VOLUME IN THE DAIRY INDUSTRY

(A  Study of Wamco Nig. Plc)

CHAPTER ONE

INTRODUCTION

1.1      BACKGROUND OF THE STUDY

A study of the evolution of packaging is inextricably linked to the evolution of consumption habits in particular, and of society as a whole (Zeithaml, V. 1988). In the rural society which prevailed until the industrial revolution of the 19th century, packaging was as rudimentary as the living conditions of the time. Packaging was often standardised and could be used for a number of different purposes: transporting food, wood or tools. We are talking more about receptacles than about packaging, a role they did not fulfill with much success. The role of packaging was just to ensure the conservation and transportation of products.

The industrial revolution gave a considerable impetus to the need for packaging. Mass production and developments in modes of transport created new needs. We moved from a society where trade was limited and each community produced goods it needed to a society where activities became more and more specialised. Products were no longer used by their producer or his or her immediate neighbours, but were now transported, sold and consumed. New manufacturing procedures and transport conditions determined the forms that packaging should take. That is how barrels evolved especially adapted for sea transportation, as well as boxes that were easy to move and store. The packaging of products had the principal aims of protecting them and facilitating their transport, making them available to more people. Retailers would then simply unpack products before selling them. Individual packaging was not yet used and no real thought had been given to packaging as a means of communication or as a sales tool. Products were packaged and then sold in bulk. Shopkeepers handled the products, weighing and wrapping them individually, with little concern for hygiene, while their customers watched carefully to make sure they were getting what they asked for.

The second packaging revolution came after the Second World War, parallel to the development of the post-war economy. After having been used to serve the principally needs of the product (protection) and then to the producer (transportation), packaging began to focus on the needs of the consumer. Distribution systems were in the process of changing radically, from open markets and small local grocery stores to supermarkets. From then on, packaging was used for each individual product, so that it was ready to be picked up from the shelf and taken away by the consumer. The era of self- service had begun thanks to packaging of pre-packed products. Products were pre-packed. Another consequence of this new method of consumption was that information about the product could be printed on the packaging. After all, the shopkeeper was no longer relieve to convey the necessary information in a large supermarket. Consumption rose considerably, as did the population. This was the age of the baby boom, which was twinned by a consumption boom, packaging being the pre-condition for the modern retail trade. Packaged products soon became a much-desired commodity and packaging had to adapt to the latest trends. It is no coincidence that the mass introduction of plastic packaging dates from this era. Packaging was to emerge as an industry, and was automated to keep up with the accelerating pace of developments. Demands for quality began to rise, thus making ever greater demands on state-of-the-art technologies. The increasing importance placed on the individual and the increase of working women made it once again necessary for packaging to find a means of surpassing itself. Consumption became mobile, people were on the move and time was precious. Packaging faced up to this new challenge by means of vacuum- packed food, using materials that could withstand the impact of being taken out of the deep-freezer to be popped into a microwave. As if this growing complexity was not enough, consumption also became more global. Products made on the other side of the world had to be delivered in perfect condition. Packaging had to be made even more resistant, protective, and easily transportable.

The (provisional) end of this story is evident in shops and daily lives. Supermarkets should be able to offer ever more exotic products, our household appliances have sometimes travelled many kilometres before reaching our homes, and our fridges are filled with convenience foods (Rettie R. et al. 2000). The world is becoming a truly global village. Packaging has played a key role in this.

1.2      STATEMENT OF THE PROBLEM

The general public has little understanding of packaging as it is the product that is of interest. The consumer/customer package may influence the consumer/customer at point of purchase, but the transport package is only interesting to manufacturers and distributors (Firstenfeld, J. 2005).

Industry and individuals must continue to strive for effectiveness and efficiency to make their businesses competitive. Obviously packaging is a necessary facilitator in this global trade (Aaker, J. L. 2009). It is a guarantee for proper distribution of food and other necessities to people and industries all over the world. Therefore the packaging industries  are faced by a number of challenges, namely

·        Developing  tools to demonstrate how to utilise packaging in product development, thus making products competitive in different markets.

·        To gain understanding of the supply chains serving different industries and organisations in detail, analyse the consequences of new supply structures and changes that influence packaging.

1.3      OBJECTIVES OF THE STUDY

The main objective of the study is to determine the role of packaging as a marketing strategy. The subsidiary objective includes:

·        To examine how packaging shape affects purchase quantity

·        To investigate if packaging and design is a marketing strategy

·        To examine if package type affect buyer volume perception

1.4      RESEARCH QUESTIONS

In order to achieve the purpose of this research study, the study will attempt to provide answers to the following research questions.

·        Does package type affect buyer volume perception?

·        Does Package shape effects, Visual Perceptual Biases and Purchase Quantity decisions?

·        Is packaging and design a marketing strategy?

·        Does package shape affect purchase quantity?

·        Does packaging influence consumers’ brand choice?

·        Do different kinds of packaging evoke different reactions in consumers?

1.5      RESEARCH HYPOTHESES

A hypothesis is a conjectural or tentative statement of the relationship between two or more variables. In this research project, The following hypotheses will be tested.

Hypothesis One

Ho:      Product packaging does not have significant influence on sales volume

H1:      Product packaging has significant influence on sales volume

Hypothesis Two

Ho:      Product package shape does not effect, Visual Perceptual Biases, Purchase Quantity decisions

H1:      Product package shape effects, Visual Perceptual Biases, Purchase Quantity decisions

1.6      SIGNIFICANCE OF THE STUDY

The relevance of this study is to produce information on the role of packaging as a marketing strategy that will be useful to:

Members of the board or councils of WAMCO Nig. Plc.  Also those at the helm of the organisation, which include high level, managers, and low level managers in the industry, the financial managers, accountants, auditors and marketers who carry out marketing promotion and distribution.

The study is would also contribute to theoretical framework and add to body of knowledge, as well as for further studies.

1.7      SCOPE AND LIMITATION OF STUDY

The premise on which this study is based is that, product packaging has  effect on sales volume in dairy industry with special reference to Wamco Nigeria Plc. The research work will be conducted on data that will be garnered from Wamco Head Office situated at Ogba, LagosState. Data will also be collected from consumers of Wamco products residing at Ifako/Ijaiye Local Government Area of Lagos State.

The study will further identify the fundamental limiting factor which most managers usually encounter in product packaging design.

Limitations

In the course of conducting this research work it is expected that the following will constitute impediments to the effective conduct of the study

a)        Time constraint within which the study must be completed.

b)        Financial constraint

c)         Inaccessible and inadequate data

Nevertheless, I believe the above limitations will in no way affect the reliability and validity of the research study.

1.8      HISTORICAL BACKGROUND OF THE STUDY

Peak Milk arrived Nigeria 1954 with importation of peak milk only. The company was incorporated as West Africa Milk Company (WAMCO) Incorporation in 1973 and started the local production of Peak Milk in 1975. A can factory was launched in 1978 and commenced the production of many of its products that includes;

WAMCO was certified as the first dairy company in Nigeria to be ISO certified in 1997. WAMCO started the local production of powder milk in 1999 with the launch of her first powder factory. The second powder plant was launched 2005. WAMCO Plc was renamed Friesland Foods WAMCO Nigeria Plc. In the year 2005. It was again renamed FrieslandCampina WAMCO Nigeria PLC in the year 2009.

Friesland Campina WAMCO Nigeria Plc has remain the largest dairy production company in Nigeria with its products sold nationwide and across Africa countries.

1.9            OPERATIONAL DEFINITION OF TERMS

Packaging: A coordinated system of preparing goods for safe, efficient and cost-effective transport, distribution, storage, retailing, consumption and recovery, reuse or disposal combined with maximising consumer value, sales and hence profit

Supply Chain: is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer.

Purchase Intention: The likelihood that a consumer will buy a particular product resulting from the interaction of his or her need for it, attitude towards it and perceptions of it and of the company which produces it.

Brand Marketing: is the art/science of making the right impression on prospects

Purchase Quantity: The economic lot size for a purchased

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