AN EVALUATION OF THE COST OF PACKAGING AND ITS IMPLICATION ON THE PROFITABILITY OF AN ORGANIZATION
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AN EVALUATION OF THE COST OF PACKAGING AND ITS IMPLICATION ON THE PROFITABILITY OF AN ORGANIZATION
Chapter one
INTRODUCTION
1.1 Background of the Study
We live in a world where our foods, resources, and clothing are largely packaged. We employ packaging in a wide range of sizes, shapes, and materials.
Packaging refers to all of the tasks in product planning that involve designing and producing a product’s container or wrapper. The wrapper container is known as the package.
The external cover of a product box is commonly referred to as the silent salesperson since it has the potential to encourage customers to make impulse purchases.
It draws quick attention to the product, stimulates demand, and boosts sales. It is sometimes stated that packing costs much outweigh all other marketing strategies used to convey items from manufacturers to customers and to affect the pricing of goods and services.
It should also be noted that, while considering packaging as a marketing strategy, emphasis is placed on the vast and environmental concerns associated with packing.
These activities were emphasised by Lemar and Dobler’s (1992) cost analysis research, which discovered that whereas advertising accounts for only around two percent of total costs, packaging materials account for approximately twenty-two percent in most industrial organisations.
When it comes to environmental problems, packaging accounts for one-third of the waste we throw away.
The study project aims to evaluate the costs associated with packaging and the influence they have on the profitability of industrial organisations.
It goes on to explain in depth the advantages and downsides of packaging for society and the economy.
1.2 Statement of the Problem
In recent years, packaging has faced an almost continual storm of criticism for a lack of care paid to packing. Packaging has been criticised of being deceptive, overpriced, polluting, predicting inflation, offensive, and even immoral.
Packaging is the most widely used and well-documented component of modern business. The existing literature is nearly exclusively confined to articles and reprints of presentations dealing mostly with “how to do it” and “why it was successful”.
The primary explanation could be attributed to the inclination to designate packaging as a production cost, followed by the practical services that the pack fulfils, which tend to shield it from public scrutiny of the type directed at promotional expenditures whose practical advantages are less obvious.
Currently, there is a lack of trustworthy information on packaging spending in Nigerian industrial organisations. Foreign sources often provide the majority of information on packaging expenditures. In light of this, the researcher seeks to conduct this study in order to determine the cost of packaging and its implications on manufacturing organisations’ profitability in Nigeria, with a focus on Unilever Nigeria PLC, Kaduna branch.
1.3 GOALS OF THE STUDY
This study on the cost of packaging and its effects on profitability in Unilever Nigeria PLC aims to achieve the following goals.
a. To determine the types of packaging materials utilised by Unilever Nigeria PLC
b. To investigate the cost of packaging in Unilever PLC.
c. Determine the objective behind Unilever packaging.
d. Investigate the concerns with Unilever packaging.
e. Make recommendations for improved Unilever packaging tactics.
1.4 Statement of Hypothesis
The following hypothesis has been developed in order to provide a clear direction and acquire relevant and necessary data.
Ho: Packaging costs have little effect on a company’s profits.
H1: Packaging costs affect a company’s profitability.
1.5 Significance of the Study
This study is in partial fulfilment of the award of a Higher National Diploma in Department of Accountancy, School of Business and Management Studies, [CBMS].
Kaduna Polytechnic.
The significance of this study stems from its numerous benefits to individuals and manufacturing organisations in Nigeria. First and foremost, the study makes significant contributions to students seeking appropriate literature review materials on the issue of packaging and its cost in industrial organisations.
Second, Unilever Nigeria Plc’s management will undoubtedly find this project to be very informative and a useful decision-making tool, particularly in the area of packaging.
Finally, the general reading audience will find this project research extremely educational and valuable in terms of general knowledge.
1.6 Scope of the Study
Packaging is a significant cost component in the manufacture and marketing of goods in Nigerian industrial organisations. However, conducting a nationwide survey that includes all industrial industries in Nigeria is an overwhelming endeavour that exceeds the researcher’s resources. Based on this, the study is limited to Unilever Nigeria Plc’s Kaduna branch.
The study looks at the material design and types of packaging used by Unilever, as well as the costs involved.
1.7 Historical Background of Unilever Nigeria Limited
From its modest beginning in Nigeria in 1923, Lever Brothers as it was formerly known, now Unilever Plc, has given into a successful economic grant, thanks be to the foresight of its founder William Hesket Lever, who saw in Nigeria the potentials of a vast market beyond the United Kingdom,
where he had already been founder of Lever Brothers United Kingdom, the Nigeria branch of his company was initially known as Lever Brothers (WA) Limited when it was incorporated as a private A year later, in 1924,
the company changed its name to West African Soap Company Limited. Sensing a profitable future in the Nigerian market, the business established its own facility in Apapa in 1924 to create bar soaps. Lever Helmet died a year later in 1925.
Thirty years after establishing its business in Nigeria, the company changed its name to Lever Brothers Nigeria Limited in 1955. It has since branched into the production of foodstuffs. As time passed, its product line expanded to include personal care goods. Of course, bar soap production remained and even increased with the opening of the second UNL factory in 1958, this time in Aba, in Nigeria’s eastern section, today known as Abia state.
The company was still foreign-owned at the time. With the natural desire for the country to be involved in, and even control, its economy,
the Nigerian government implemented the indigenization programme in 1972, which allowed Nigerians to own the majority of foreign-owned companies. Some corporations have sold out and left the nation.
Others stayed and adhered to the new policy. Unilever Nigeria Limited was among the latter, selling 60% of its shares to Nigerians. UNL and its shareholders have benefited greatly from both domestic and international business.
Unilever Nigeria Limited continued to expand, particularly with the introduction of new product lines, such as goods, to meet rising consumer demand. In 1982, UNL commissioned an ultra-modern factory near Lagos in Agbara, Ogun State, to manufacture edible products.
In addition, there is the ‘MASTERLINE BAKERY CENTRE’ at Agbara for baker training and the development of new good products based on the use of local raw materials,
particularly with the Nigerian Government’s ban on wheat importation in the 1980s, necessitating the use of non-wheat or local grain substitutes for flour.
In addition to UNL products, it absorbed additional companies under its umbrella. Lipton of Nigeria was absorbed in 1985.
Three years later, in 1988, Chesesbrough Products Industries Limited, which manufactures Vaseline and Ponds products, joined the UNL. Currently, A.J. SEWARD has joined. Thus, true to its founder’s objectives, Unilever Nigeria Limited’s business grew and expanded through leads and bonds.
Today, Unilever Nigeria Plc’s product assortment is extensive, with over fifty options available in various wallet sizes. UNL’s high-quality brands have made it a Visible Friend in every Nigerian home,
as well as throughout the West African sub-region and Central Africa. A happy consumer audience has rewarded UNL with the market’s leading share.
ABBREVIATIONS
UNL: Unilever Nigeria Limited.
KJ: Standing Measurement of Energy
1.8 Definition of Terms
The terminology used in this project research activity are defined as follows:
Analysis is the resolution of sample elements, such as a summary of data into tabular form, which can take the form of a chart or diagram.
Packaging refers to all of the operations involved in designing and producing the product’s container or wrapping.
Expenditure: The amount of money spent on doing something.
Slack Fills: Product space that remains empty during the design and production of unit packaging.
Added value: The increase in value of materials, components, or other commodities as a result of any input, such as processing, handling, distribution, or any other marketing activity.
CAN: Canister’s dimension. A metal container, typically made of tin-coated mild steel, used to preserve or dispose of liquids or solids, particularly food.
Marketing is the business process in charge of finding, predicting, and satisfying client needs profitably.
Total cost is the sum of labour, material, and direct costs, as well as overhead costs.
Material is something that can be utilised to cover or manufacture a product.
Marketing Mix: A marketing strategy that includes all parts of marketing planning and execution, such as pricing, promotion, product, and so on.
Respondent: a person who provides information or answers to research inquiries.
A label is a card, tag, patch, or other attachment to a product or package that gives it a distinct identification.
Rubbish: Waste, stuff that should be thrown away.
Plc is a public liability company.
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