THE IMPACT OF BRANDING AND PACKAGING ON SMEs SALES PROMOTION (A STUDY OF THREE SELECTED SMALL MEDIUM ENTERPRISES IN ETIOSA L.G.A, LAGOS STATE)

CHAPTER ONE

INTRODUCTION

1. 1. BACKGROUND OF THE STUDY

In a world of unprecedented competition as organisations having goods and services to sell to the consumers need to brain storm so to be able to satisfy the consumers and retain the organisation in the market place, hence the organisations need to choose concrete marketing mix to enable them compete favourably. The essence of marketing mix is the product development while the product mix is the set of activities that start with perception of market opportunity that leads to the end with production, sales and delivery of the product (Ulrich and Eppinger, 2007). Product mix cannot be completed without successfully branded and packaged of the product. Branding and packaging play a significant role in the differentiation, presentation and protection of goods preservatives. The aspect of packaging is to store products, reduce any form of damage, loss to the goods and curtail pilferage while branding is much more than a name for labelling a product. Consumers who buy certain product not minding other products are said to be loyal to such brand as they have internalised the purchasing to the point where it is no longer a conscious decision (Vaid, 2003). However, every producer wants this as they no longer have to invest time and money in convincing consumers to buy their products. Consumers have this notion that a brand speak to them and represents a lifestyle they have or aspire to have or even give them a special service they want and it is important that organisations maintain and manage this relationship. Brand design being a differentiator as well as a territorial marker even as some believed that it is not only about ubiquity, visibility and functionality but also emotionally bonding with the target group of customers which could be attributed to the packaging. Branding definition was developed in 19th century in the time of industrial revolution as it turned increasingly important for manufactures to create identifiable names and symbols to differentiate organisations’ products from the competitors.Today, branding makes an organisation’s product name or an image to be synonymous with a set of values, aspirations or state and it exercises an overwhelming influence on consumers. It is also known that consumers use both rational and emotional considerations in deciding the brand to purchase. It is on this premise that the aim of the study is based on analysing the extent to which branding and packaging of products reach the market without the use of any form of commercial, determine if branding and packaging is being projected through its branding and packaging policy and what positive effect do branding and packaging have on the buying decision and habit of consumers. This paper will reveal the essence of branding and packaging as promotional device to consumers and producers. This study is to address the problems of knowing if branding and packaging can serve as promotional implement for marketing products, affect consumers’ buying decisions and project the image of the organisation or even resolve the sale of the products.

1. 1. STATEMENT OF PROBLEM

The approach of SMEs to branding and packaging differs from the practices applied by large companies (Berthon et al., 2008). The main reason for this is that SMEs have limited resources and budget (Ahonen, 2008). Besides, SMEs need to face the challenges not only from the similar but also much stronger large firms in the same competitive environment. So, the brand strategy in SMEs should be built upon and apply for internal and external challenges (Abimbola, 2001). Abimbola (2001) gives a general idea of brand management is to use brand to integrate innovation and resources within the firm. Furthermore, the design and implementation of the SME branding and packaging must be more careful than major brands. For huge quantity of SMEs, the resource-base is a determinant of their potential capabilities (Magnusson and Nilsson, 2005). However, Berthon et al. (2008) point out that even with constrained budgets, the SME branding and packaging still can be creatively managed, and the key of branding is in the hands of the SME owner-manager. SMEs have been largely overlooked. Berthon et al. (2008) and Krake (2005) find that some of the conventional principles prescribed in the marketing literature are invalid to be applied to the SMEs’ marketing problems in the branding practices. So, the problem is “the impact of branding/packaging in SMEs sales promotion”.

1. 1. AIMS AND OBJECTIVES OF THE STUDY

The major aim of the study is to examine the impact of branding and packaging on SMEs sales promotion. Other specific objectives of the study include;

1. To examine the nature of branding and packaging by SMEs.
2. To examine the extent branding and packaging influence the decision of consumer.
3. To examine the impact of branding and packaging on SMEs sales promotion.
4. To examine the strategies put in place by SMES to promote sales of their products.
5. To examine the relationship between branding/packaging and SMEs sales promotion.
6. To examine the problem affecting branding and packaging in SMEs.

1.4.RESEARCH QUESTIONS

1. How is the nature of branding and packaging by SMEs?
2. To what extent has branding and packaging influence the decision of consumer?
3. What are the impacts of branding and packaging on SMEs sales promotion?
4. What are the strategies put in place by SMEs to promote sales of their products?
5. What is the relationship between branding/packaging and SMEs sales promotion?
6. What are the problems affecting branding and packaging in SMEs?
   1. RESEARCH HYPOTHESES

HYPOTHESIS 1

H0: There is no significant impact of branding and packaging on SMEs sales promotion.

H1: There is a significant impact of branding and packaging on SMEs sales promotion.

HYPOTHESIS 2

H0:There is no significant relationship between branding/packaging and SMEs sales promotion.

H1:There is a significant relationship between branding/packaging and SMEs sales promotion.

1. 1. SIGNIFICANCE OF THE STUDY

The study is beneficial and important with respect to the problems under study. The researcher is intended to examine the problem and prospects of sales promotion of an organization branded and package product. Since the ultimate foal of any business organization is to optimize profit by minimizing cost; management should know how to tackle sales promotion in their organization. Organization other than those located in Etiosa L.G.A, Lagos state who is into sales promotion of their branded and packaged product will benefit generously from the study of better performance.It is therefore hope that the result of the study, if properly implemented will enable the organization improve their customers better and attract new ones. The consistent improvement of their quality of the product and services based on the findings of this study will help gain a sustainable customer confidence and patronage and hence improve productivity, profit and growth of the country’s economic development.The Research will provide companies with new and updated information because review of the literature shows the previous researches done on packaging was scattered, which included limited information about packaging. In past research have been made on narrowed and common factors of packaging but in this research also determine how the changes in product packaging and branding can promote sales and tells what are the most important aesthetic elements of packaging that prompts and attract the buyers to purchase the product at the point of purchase. Therefore this research will help marketers to consider these findings also discovered in research and implement in their plan in creating and selecting the appropriate design elements and attributes for their product package and will allows companies to be different from each other and to have more priorities among competitors.

1. 1. SCOPE AND LIMITATION OF THE STUDY

The study is restricted to the impact of branding and packaging on SMEs, case study of three selected SMEs in Etiosa L.G.A, Lagos state.

1. 1. 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.

1. 1. DEFINITION OF TERMS

Branding: Is a name, term sign, symbol or design, or a combination of them in tented to encourage prospective customers to differentiate a producer's products from those of competitors. It is also an output of a commitment by management to invest in the product management.

Packaging: Is the act of containing, protecting and presenting the contents through the long chain of production, handling and transportation to their destinations in as good a state, as they were, at the time of production. Packaging is an important part of the branding process as it plays a role in communicating the image and identity of a company

Sales:The activity or business of selling products or services. Sales are activities related to selling or the number of goods or services sold in a given time period. The seller or the provider of the goods or services complete a sale in response to an acquisition, appropriation, requisition or a direct interaction with the buyer at the point of sale.

Promotion:In marketing, promotion refers to any type of marketing communication used to inform or persuade target audiences of the relative merits of a product, service, brand or issue. The aim of promotion is to increase awareness, create interest, generate sales or create brand loyalty.