EFFECT OF PRODUCT RE-PACKAGING ON THE SALES REVENUE OF COMPANIES
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EFFECT OF PRODUCT RE-PACKAGING ON THE SALES REVENUE OF COMPANIES
ABSTRACT
Product packaging is an important aspect of product development and planning that involves the design of a product’s container or wrapper, which serves two purposes: to protect the item and to increase its value to the buyer.
The research indicated the challenges related with the topic under examination, which included management’s failure to capitalise on the multiple benefits of re-packaging their items on time.
Another issue that national managers face is that customers will always choose their items because they are in low supply or the quality is high enough to sell themselves. Under study methodology, the researcher used a basic random procedure to ensure that each responder had an equal chance of being selected.
The population of the study was taken for an in-depth study on the Milo drink product by Nestle Nigeria Plc, of which 30 consumers were selected in Aba for the sample size. Data was collected using the necessary instrument.
In analysing the data, person product moment correlation was used to measure the degree of association or relationship that exists among economic variables percentage, and chi-square was also used in analysing data.
After analysing the data, the following conclusions were reached, including the establishment of a very strong association between a firm’s repackaged product and consumer preference for the same product using percentage and chi-square. The study was also able to find a strong positive association between re-packaging a product and revenue generated by that product.
The study also discovered that most consumers increase their product consumption in response to a well-packaged product, with 68% of consumers confirming that they will buy more of the product if it is re-packaged.
Finally, the researcher made the following recommendation: forms should wait until their product’s sales begin to decline before embarking on repackaging. In addition, the firm should hire competent and experienced employees that are informed about packing processes.
Chapter one
1.0 Introduction
General Description of the Study
Packaging is the aspect of product development that deals with the design of the item and how it adds value to the buyer. It is a crucial aspect of product planning and development, and thus of the overall marketing strategy. Packaging activities include designing and constructing a product’s container or wrapper (Kotler, 1984, p. 400).
Packaging has been around as long as humans have. Humans have always had a need to safeguard and preserve their ideals. The early men employed basic packaging materials such as animal skin, animal bladder, hollow tree truck, and leaves.
Some of these early methods for wrapping products such as moi-moi. Some have undergone changes as a result of the industrial revolution. For example, cell phones and waterproof materials have replaced animal skin and bladders.
Modern packaging design is a complex combination of marketing, design theory, and even research into visually appealing packaging. The packaging is an intrinsic aspect of the product in the best possible way.
It thus serves a dual purpose of being a container or wrapper (protector) as well as a promotional packaging. Packaging serves as a sales appeal, motivates customers, and differentiates products. It provides utility or convenience in time and place, and allows consumers and distributors to identify a product and its manufacturers.
In a wide range of consumer items, packaging is vital to the buyer’s recognition of the product and subsequent purchase. Most purchasing decisions are based on packaging, particularly for new products and buyers who do not have a specific brand in mind before visiting a supermarket. Packaging benefits both the seller and the buyer.
For the seller, it allows for better product protection, more effective physical distribution, and advertising, which leads to more sales and profits. It improves the product and, in certain cases, stores it when it is not in use.
It also assists clients in identifying the goods, providing information about its use, and keeping it fresh and undamaged until it is needed. Furthermore, packaging lowers unit costs and increases dealer acceptance,
allowing products to adapt to new firms and purposes. It enables clients to make more effective and necessary use of the product, increasing the firm’s turnover and sales profit. (Kalu 2002, p. 105).
Re-packaging is the technique of retaining a well-known product but modifying the appearance or size of the box. This has the effect of revitalising the product image.
Customers now perceive the repackaging of the product as a new and improved version of the previous one. To this aim, repackaging as a selling tactic may have a favourable impact on a company’s sales volume and revenue.
This is why, in some cases, packaging and re-packaging are the most important aspects of a company’s marketing programme (Ogbechie 1989, p. 15). The greatest advantage of this strategy is that all users of the product will be happier with the product, while many users of competitors’ products will be more willing to try the re-packaging product.
1.1 Background of the Study
Nestle Nigeria Plc is part of the Nestle Group, the world’s largest food manufacturer, and is well-known for its high-quality products and repackaging strategy. Nestle Nigeria Plc began a basic trade activity in Nigeria in 1961 and has since developed into a significant food manufacturing and marketing corporation.
It is a publicly traded corporation that has been listed in Nigeria since 1978, with stockholders owning around 43% of the company. Nestle S.A. of Switzerland owns approximately 57% of the company’s shares.
Its headquarters facility is located at 22-24 Industrial Avenues, Ilupeju Lagos Badagry Motorway, Agbara Industrial Estate in Ogun State and covers an area of 16 hectares.
The major production units were designed in accordance with current manufacturing methods, resulting in efficient manufacture of the following products.
Nestle Cerelac
Nestlé Nutrend
Nestlé Cerelac Maize
Nestle Cerelac Chocolate flavour
(All infant supplements and complementary cerelac)
Golden Morning (An Infant Cerelac).
Nestle Wescac (beverage drink).
Nestle Milo (a beverage drink)
Nestle Nescafe (a 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 national market at a pen-Nigeria price, which is the same for every buyer anywhere in Nigeria.
The distribution centre at Ota Industrial Estate occupies an area of 23,000 square metres and has a capacity of over 21,000 pallet units or 16,000,000 confirm finished product stocked to a maximum height of five metres.
The company’s goal is to meet the consumer’s need for high-quality food items, mostly by turning perishable raw materials into long-lasting products that are tailored to the consumer’s tastes and eating habits.
The replies to the questionnaire revealed that the company’s most successful product is its “Milo” drinking drink. The product’s popularity was due to a variety of factors, including consumer repackaging. Infant milo has been repackaged seven times since its inception in Nigeria in 1968.
1.2 Statement of the Problem
Many products remained to train at the market place even after they had previously achieved some success; such enterprises suddenly began losing patronage, resulting in diminishing sales value and revenue. The circumstance refuses to change the management term, cut the price per unit, raise promotional expenditures, or expand its distribution network.
One possible explanation of the downturn could be traced back to management in such enterprises’ inability to capitalise on the multiple benefits of re-packaging their products on time.
Again, once a certain packaging has been established, they stick with it even when consumer tastes, needs, or preferences change over time. Unknowingly, they permitted their product to become obsolete.
Most managers believe that because the product is in short supply and the quality is high enough to sell itself, they spend a larger portion of their promotional budget promoting the assumed high quality of the core product, hoping that consumers will not consider any other factor (s) before purchasing.
Many other firms that have attempted to re-package their product do so incorrectly and inadvertently due to their managers’ inability to correctly predict changing consumer behaviour, facilitating survival problems.
In order to help reduce Nigeria’s high firm mortality rate, it is necessary to determine the extent to which re-packaging of a product attracts the sales value and revenue of firms. The study will also establish the proper repackaging firms should take, as well as the ideal timing for effectiveness.
1.3 PURPOSE OF THE STUDY
The study will aim to achieve the following:
Identify the numerous methods of repackaging a company’s product.
Determine the rationale for such repackaging.
Determine the repackaging issue facing manufacturing firms.
Suggest some remedies to the highlighted difficulties, as well as some practical advice.
Identify some of the benefits of timely product repackaging.
To determine whether there is a relationship between a firm’s repackaged product and consumer desire for the same product.
To determine the relationship between a repackaged product and its sales volume or revenue.
1.4 RESEARCH QUESTIONS.
The research question should be guided by the following research questions.
What are the different methods of repackaging a product?
When is repackaging necessary in a product’s life cycle?
What are the functions of packing and repackaging?
What are the benefits of repackaging goods or products.
What is the relationship between a repackaged product and its consumer preference.
What variables can limit or prevent a company from implementing the strategy or repackaging. Its product, even when it recognises the need to do so.
What is the relationship between repackaging a product and the resulting sales volume or revenue.
1.5 Significance of the Study
This research report serves as a partial fulfilment of the study and requirements for the institution to offer me a National Diploma in Marketing. The study’s findings will help me (the researcher) understand the numerous ways to repackage a product and the impact that repackaging has on a company’s sales revenue.
To my followers, students and other researchers who wish to conduct research on the attributes of a product, particularly packaging, the findings of this study will help them understand the functions, benefits, various types of packaging, and their impact on the firm’s sales revenue.
The findings will be valuable to businesses whose products are on the verge of failure or have failed as a result of their management’ incapacity to adapt to changing consumer tastes and preferences and hence are unable to know how to re-package their products to reflect these changes.
In this approach, they continue to lose customers and market share. Even enterprises who are already reaping the benefits of timely re-packaging, such as the case study in this paper, may discover untapped methods or forms of re-packaging a product,
allowing them to expand their market share, portability, and growth in the future. Consumers will profit from this study as well because they will gain a better knowledge that repackaging a product is still their “dealing” product, but it will be presented better.
1.6 SCOPE OF THE STUDY
A manufacturing firm was chosen as a case study to conduct a thorough investigation of this research topic. The study used the company’s most repackaged product. In reality, the corporation has repackaged the product at least five times since its entry into the Nigerian market.
Consumers in Aba, Abia State, Nigeria were utilised to research customer reactions to repackaged products. Consumers both inside and outside of Aba would have responded to the repackaged products. This is because Aba isn’t the only town that prefers the product’s taste.
1.7 Limitations of the Study
The time limit for submitting the research report is extremely short; in other words, it will not allow for extensive research that includes references to other manufacturing organisations as case studies. This is because such extensive research will require a significant amount of time.
Second, the investigation was constrained by insufficient resources. This hampered the expansion of consumer response to the re-packaged products beyond Aba, Abia State.
And the staff and management questionnaire administered to staff and managers in the company’s Abia regional office would have gone beyond that if there had been enough funds to visit other regional offices.
The most significant drawback of this study is the company’s public relations manager’s unwillingness to disclose material required for research. This is because they consider such information strategic and must not be revealed to the public for fear that it may get into the “wrong hand” who will use them against the company.
Even at the region offices, I was first sent as an agent from the competitors to spy on the performance of the company, though in the long run, I was assited, but the management was still afraid of being seen as sabotaging the company and so unable to supply information in their custody.
1.8 Definition of Terms
The following terminology used in this chapter have been defined to aid comprehension of the topic.
Customer: A person or organisation who purchases something or uses the services of a shop, store, or business.
Consumer: A person who purchases things or services and uses them for personal gratification.
Promotional Tools: These are the tactics or means that a corporation uses to promote its products.
Cooperation Gaol: This is a firm’s overall aim and interest in a specific product that it has manufactured.
Innovation is the introduction of new products, ideas, or methods of accomplishing something.
Crude packaging refers to archaic or antique partition materials used in product packaging, such as leaves, animal skin, palm leaves, and so on.
Marketing strategy refers to the actions performed by a business to achieve its marketing goals.
8. Competitors: These are firms that produce for a certain firm. These folks are in the same field of business.
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