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PACKAGING AS A TOOL OF ACHIEVING HIGHER PROFITABILITY IN A MANUFACTURING COMPANY (A Study of Nigeria Bottling Company)

ABSTRACT

This research examines packaging as a tool of achieving higher profitability in a manufacturing company. Survey design was employed with the use of a well-structured questionnaire. Respondents were selected based on simple random sampling technique. Hundred (100) questionnaires were administered to the staff of Nigeria Bottling Company. Two hypotheses were formulated and tested with the use of Chi-Square analysis. The analysis resulted to rejecting both null hypotheses and hence accepting the two alternate hypotheses. Based on decisions of the tested hypotheses conclusions were reached that there is significant relationship between product packaging and organizational productivity, also Product packaging has significant influence on sales volume. Recommendations were proffered to Nigerian Bottling company and other manufacturing companies.

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 able to arrive  shops 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).

Some organisations do not really appreciate packaging, they see packaging only as a means of protecting products for transportation purpose. For this reason, they package products with cheap materials for the purpose of protection during delivery.

Small scale manufacturers do not spend much on packaging their products. Some see it as a waste of money basically because they are scared of adding to the cost of production

Packagingindustries are also faced by challenges of developing  tools to demonstrate how to utilise packaging in product development, thus making products competitive in different markets.Also 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.

This research work tend to provide solutions to the above problems as it examines, packaging as a means of achieving higher productivity.

1.3      OBJECTIVES OF THE STUDY

The main objective of the study is to determine the role of packaging as a means of achieving higher productivity. 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

·        To examine how package design informs consumers’ perception of the product and brand.

·        To examine how packaging perceptions dictate consumer purchasing behavior

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 packaging enhance organizational productivity?

·        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:      There is no significant relationship between product packaging and organizational productivity

H1:      There is significant relationship between product packaging and organizational productivity

Hypothesis Two

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

H1:      Product packaging has significant influence on sales volume

1.6      RESEARCH METHODOLOGY

For the purpose of collecting necessary data for this research work, primary and secondary data collection method will be used. The primary data collection method will be through the following:

1.        Structured questionnaire

2.        Personal unstructured interview

3.        Observation

The secondary data will be collected from reports and documents from the company. Also, reports outside the company and from library and desk research literatures will be used.

In this study, descriptive method will be used to analyze data and also in testing hypothesis, chi-square (X2) will be employed. Findings from this research study will be discussed in the light of the research problem hypothesis, purpose research questions, literatures of the research and other relevant issues conclusions will be drawn and recommendations and suggestions also will be made.

1.7      SIGNIFICANCE OF THE STUDY

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

·        Members of the board or councils of Nigeria Bottling Company Plc.

·        Those at the helm of the organisation, which include high levelmanagers, and low level managers in the industry

·        The financial managers, accountants, auditors and marketers who carry out marketing promotion and distribution.

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

1.8      SCOPE AND LIMITATION OF STUDY

The premise on which this study is based is that, product packaging has  effect on organizational productivity with special reference to Nigeria Bottling Company [NBC]. The research work will be conducted on data that will be garnered from NBC situated at Ikeja,LagosState. 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.

1.11       HISTORICAL BACKGROUND OF THE STUDY

Nigerian Bottling Company Plc is a marketing company engaging in the brewing of soft drinks of which Coca-cola takes a paramount position among its product line.

Nigerian Bottling Company was incorporated in Nigeria in the year 1951 by the reverend Chief A.G. Leventis. From humble beginning in 1951 and under high inspired leadership, the company has grown to become the largest soft drinks bottler in Nigeria and one of the largest employers in the country, operating about 20 production plants as well as 65 sales depot throughout the Federation of Nigeria with its Administrative head office at Oyingbo, Lagos State, formerly at Iddo, Lagos State.

The Nigerian Bottling Company is a noticeable giant among first class Bottling Companies and is also reputed as having the same status in all the state of the country. Because of its excellent performance over years, there is no doubt that its features of operation will provide good presentative information in other similar organizations.

Suffice is to say that the company provides range of employment opportunities to school leavers and professional in the field of commerce and marketing. In view of the fact that product packaging is just being newly developed in Nigeria and its view are only being embraced by larger scale ventures, Nigerian Bottling Company- Coca-cola to be specific has been noted for their involvement in packaging their products, which has been increasing their level of sales and profitability.

There is no doubt, however, that the company tinder consideration with its distinct features and give a good highlight of the impact of product packaging in business organization both in the short and long run.

1.12       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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