The Effect Of Product Re-Packaging On The Sales Revenue Of Companies

Project and Seminar Material for Marketing

The Effect Of Product Re-Packaging On The Sales Revenue Of Companies


Abstract


Product packaging is an important part of product development and planning which relate to the design of a products container or wrapper, whose purpose is both to protect the item and to enhance its value to the customer. the research stated the problems associated with the topic under study, which include the inability of management to take advantage of numerous benefits derivable from re-packaging their products, as at when due. Another problems the nation managers have that customer will always patronize their products since the product is in short supply or the quality is high enough to sell itself. Under research methodology, the researcher employed the used of simple random technique, which will give the respondent equal chance of being selected. The population of the study was taken for an indepth study which is Milo drink product by nestle Nigeria Plc of which 30 consumer were selected at Aba for the sample size Data where collection using the necessary instrument.in analysis the data, person product moment correlation was used to measure the degree of association or relationship that exist among economic variables percentage and chi-square was also employed in analyzing data. The following findings were made after analyzing the data which include to establish a very strong relationship between a firm tre-packaged product and consumer preference of the same product using percentage and chi-square. The study was also able to establish a strong positive correlation between re-packaging of a product and the sales of revenue derivable from such as product. the study also found out that most consumers increase their consumption of product in response to a well packaged product which 68% of the consumers affirmed to by saying that they will buy more of the product is re-packaged.Finally, the following recommendation were made by the researcher forms should wait their product starts experiencing declining sales before embarking on re-packaging. And also firm should recruit qualified and will experienced staff are knowledgeable in packaging techniques.


Chapter One


Introduction

1.0 General Description of the Study

Packaging is that part of product and development which relates to the design of the item and to enhance its value to the customer. It is an important part of a product planning and development and therefore important in the total marketing strategy. Packaging involves the activities of designing and producing the container or wrapper for a product (Kotler, 1984 page 400). The origin of packaging is as old as man kind. Human beings have always had need to protect and store their values. The early men used such crude packaging materials as animal skin, animal bladder hallow tree truck and leaves. Some of these early method to wrap such product as moi-moi. Some of them have undergone some transformation as a result of the industrial revolution. for example, cell phone or waterproof has replaced animal skin and bladder.

Modern packaging designing are a sophisticated of marketing, design theory and even research into an aesthetically pleasing packaging. The packaging is an integral part of the product in the most favorable way. It therefore serves dual purpose of being a container or wrapper (protector) and being a promotional to packaging serves as a sales appeal, motivates customers and product differentiation it gives utility or convenience in time and place, and enables consumers and distributors to identify a product and its manufacturers (Kalu 2002, page 104).

In vast number of consumer goods, packaging is critically important to the buyer’s recognition of the product and subsequent purchasing. Most buying decision are based in the packaging, especially for new product and for customers that do not already have particular brand in mind before entering a supermarket. Both the seller and buyer benefit from packaging for the seller, it permits the protection of the product more efficient physical distribution, promotion of the product ultimately higher sales and profits the buyer gain similarly. It enhance the product and sometime provides storage for the product when not in use. It also helps the customers to recognize the product, provide information concerning its use and help keep it fresh and undamaged until it is needed. Furthermore, packaging reduces unit cost and promotes dealer acceptance, introduces product to adapt to new firms and uses. It helps customers make better and more require use of product and thereby increase the firms turnover and sales profit. (kalu 2002, page 105).

Re-packaging is the strategy of retaining the back product already known to consumers while changing its package design shape or size. This has the effect of revitalizing a product image. Customers now see the re-package of product as a new and improved version of the old one. To this end, re-packaging as a selling strategy could have a positive effect on the sales volume and revenue of a firm. This is why in some instances packaging and re-packaging is the most important aspect of a firms marketing program (Ogbechie 1989, page 15) The greatest merit of this strategy is that all user of the product will be happier with the product while many users, draw from competitors, product will be more willing to try the re-packaging product.


1.1 Background of the Study

Nestle Nigeria Plc is associated the Nestle group, the single largest food company in the world and renewed worldwide for its top quality product and its strategy of re-packaging a product. Nestle Nigeria Plc began simple trading operation in Nigeria in 1961 and has today grown into a leading food manufacturing and marketing company. It is publicly quoted company listed since 1978, on the Nigeria shareholders participation in appropriately 43% of the company’s equality. About 57% of company equity is owned by Nestle of the S.A of Switzerland. Its head offices complex is located at 22-24 industrial avenues, illupeju Lagos Badagry express way Agbara Industrial estate in Ogun state occupying an area of 16 hectors.

The main production units were designed in line with modern manufacturing method which ensures efficient product of the following products.

  • Nestle cerelac
  • Nestle Nutrend
  • Nestle Cerelac Maize
  • Nestle cerelac Chocolate flavor
  • (All infant supplementary and complementary cerelac)
  • Golden morn (An infant cerelac)
  • Nestle wescac, (beverage drink)
  • Nestle Milo (beverage drink)
  • Nestle Nescafe (beverage drink)
  • Choco milo (Chocolate sweet)
  • Maggi cubes chicken crayfish and magi super onion spices.

its distribution system ensures the widest possible penetration into the nation’s market at a pen-Nigeria price, which is the same for every buyer any where in Nigeria.The distribution center at Ota industrial estate occupies an area of 23,000 square meters and has a capacity of over 21,000 pallet unit or 16,000,000 confirm finished product stocked to a maximum height or the five meter. The company’s objective is to satisfy the requirement of consumer when the high quality food product, mainly by processing perishable raw materials into products with long self adapted to the tastes and food habits of consumer.

From the responses in the questionnaire, it was established that the company’s most successful product is its “Milo” beverage drink. The success of the product was attributed to its consumer re-packaging among other factors. Infant milo has been re-packaged seven times since its introduction into the Nigerian market in 1968.


1.2 Statement of the Problem

Many product have continued to rail at the market place even when they had earlier recorded some success, such firms suddenly started losing patronage and hence declining sales value and revenue. The situation refuses to change the management term, lowered price per unit, increase expenditure of promotion or widen its distribution network. One possible cause of the down turn could be tracked to inability of managers in such firms to take advantage of the numerous benefit derivable from re-packaging their products as at when due. Again, when a particular packaging has been adopted they hold on to it even when consumer tastes, needs or preferences are clearly changed with time. Unknowingly, they allowed their product to become absolescence. most managers believes that the customer will always patronize their product since the product is in short supply the quality is high enough to sell itself such complaints spend a greater percentage of their promotional budget on promoting the assumed high quality of the core product and hope that the consumers would not consider any other factor (s) before they buy.

Many other firms that have attempted to re-package their product do so wrongly and untimely due to their managers inability to correctly predict changing consumer behaviour’s result, they facilitate survival problem In order to help reduce the high mortality rate of firms in Nigeria, there is need to determine the extent to which re-packaging of a product attract the sales value of and revenue of firms. The study will at the same time determine the appropriate re-packaging firms should take and the best timing for it to be effective.


1.3 Objective of the Study

The following are the objectives of this study:

  1. To examine the effect of re-packaging on organizational sales revenue in Nestle Nigeria Plc.
  2. To examine the strategic importance of packaging in Nestle Nigeria Plc.
  3. To examine the effect of re-packaging on organizational profitability in Nestle Nigeria Plc.

1.4 Research Questions

  1. What is the effect of re-packaging on organizational sales revenue in Nestle Nigeria Plc?
  2. What is the strategic importance of packaging in Nestle Nigeria Plc?
  3. What is the effect of re-packaging on organizational profitability in Nestle Nigeria Plc?

1.5 Hypothesis

HO: There is no significant relationship between packaging and organizational sale turnover in Nestle Nigeria Plc.

HA: There is significant relationship between packaging and organizational sale turnover in Nestle Nigeria Plc.


1.5 Significance of the Study

The report of this research is a partial fulfillment of the study and requirements for the award of my National Diploma in marketing by the institution. The result of the study will enable me (the researcher) to understand the various ways to re-package a product and the extent to which re-packaging effect the sales revenue of a firm. To my follow students and other researcher who may wish to conduct research on the attribute of a product, particularly, packaging will be useful materials the result of this study will enable them understand the functions, benefits, different forms of packaging and its effect to the sales revenue of the firm. The result will be useful to those firms whose product are at the drink of failure or have failed as a result of their managers inability to adapt to the changing consumers taste and preference and so are not able to know to re-package their product to reflect this change.

In this way they continually loss patronage and market share. Even firms already enjoying the benefits of timely re-packaging like the case study of this study as they may discover unexploited method (s) or form (s) of re-packaging a product and so be able to future increase with their market share, portability and growth. To the society the consumers will also benefit from this study as they will come to a better understanding that the re-packaging of product is still their “dealing” product better presented.


1.6 Scope of the Study

For an indepth study of this research topic a manufacturing firm was used as a case study. The most re-packaged of company’s product was used for the study. Infact the company has re-packaged the product at least five times since introduction into the Nigeria market. Consumer in Aba, Abia State of Nigeria were used to study consumer response to the re-packaged products. And the consumer response to the re-packaged products would have been consumers in and outside Aba. This is because Aba is not the only town which has preference taste of the product.


1.7 Limitation of the Study

Financial constraint

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work


Chapter Five


Summary, Conclusion and Recommendations

5.1 Summary of Findings

The objectives of the study were;

  1. To examine the effect of re-packaging on organizational sales revenue in Nestle Nigeria Plc.
  2. To examine the strategic importance of packaging in Nestle Nigeria Plc.
  3. To examine the effect of re-packaging on organizational profitability in Nestle Nigeria Plc.

Findings from the research revealed that majority of the respondents are of the opinion that there is a relationship between packaging and organizational sales revenue in Nestle Nigeria Plc and that packaged products enjoys more patronage when compared to unpackaged products.


5.2 Conclusion

This research paper investigated the effect of re-packaging on sales volume with special reference to Nestle Nigeria Plc Cussons Nigeria Plc. The result of this study revealed that packaging has significant effect on sales revenue. The result found that packaging reduces promotion costs and increases sales. On basis of the findings, it can be concluded that packaging is one of marketing tools that convey messages about the products to consumers. This result is in line with (Chaneta, 2012) who says that packaging can make a product saleable in various target markets while branding can be used by the marketer in creating and building a customer franchise for a given product.


5.3 Recommendations

Based on the above conclusion, the following recommendations were made:

  1. The reuse of a package or component for other purposes should be encouraged by the managements of organizations.
  2. Management of organizations should increase budget for packaging.
  3. Package should be designed to separate components to better facilitate recycling.
  4. Before package development, management should take environmental responsibility, applicable environmental and recycling regulations in to consideration.
  5. Package should not be littered by the consumers.
  6. Management should ensure that package is not deceptive.

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