ABSTRACT
The main objective of the study was to determine the effect of packaging on consumer buying decision. The study sought to determine the effect of packaging reuse, protection function and packaging information on consumer perception and purchase intentions of the brand. The researcher use descriptive survey as research design with judgmental sampling techniques to select the respondents of the study. Structured questionnaire was used as research instrument and the data analyzed using simple regression. The study showed that packaging reuse affect consumer perception and purchase intention, protection function also affect consumer perception and purchase intention of the brand. It was also seen that packaging information were amongst the predictors of consumer intention and purchase intentions of the brand. It concludes that proper packaging techniques must be fully harnessed to induce consumer perception and purchase intentions. Based on the findings, the researcher recommended that the management of bottling companies should work on producing recyclable and reusable packaging which will not only increase sales, promote impulse buying. The researcher recommended that management should take into cognizance and package their product work based on the status of the customer, as it has a way of influencing profit positively, and that the management of bottling companies should ensure that customers products are tailored to reduce damages as well as offer protection of its content along the distribution channel of the organization since their purchase capacity has a very positive and significant influence on their sales volume, which in turn affect their profit. The researcher also recommended that firms should see packaging information as a positioning and differentiation tool.
Table of Content
Title Page i
Declaration Page ii
Dedication iii
Certification iv
Acknowledgement v
Table of Content vi
List of Tables ix
List of Figure x
Abstract xi
1.0 INTRODUCTION 1
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Objectives of the Study 4
1.4 Research Questions 4
1.5 Research Hypotheses 4
1.6 Scope of the Study 5
1.7 Limitation of the Study 6
1.8 Significance of the Study 6
1.9 Structural Deformation of Terms 7
1.10 Organization of the Study 7
1.10.1 Historical background of Nigeria bottling company 8
2.0 REVIEW OF RELATED LITERATURE 9
2.1 Conceptual Frame Work 9
2.1.1 Concept of packaging 9
2.1.2 Concept of consumer buying decision 12
2.1.3 Concept of packaging re-use 15
2.1.4 Concept of packaging information 18
2.1.5 Concept of protective function 20
2.1.6 Concept of perception 24
2.1.7 Concept of purchase intention 25
2.2 Theoretical Framework 28
2.2.1 Howard Sheth theory 28
2.2.2 Black box model 29
2.2.3 Nicosia theory 30
2.2.4 Innovation diffusion theory 31
2.3 Review of Empirical Studies 32
2.4 Summary of Gap In The Literature 37
3.0 METHODOLOGY 38
3.1 Research Design 38
3.2 Area of the Study 38
3.3 Population of the Study 38
3.4 Determination of Sample Size 38
3.5 Sampling Technique 39
3.6 Source of Data 40
3.7 Method of Data Collection 40
3.8 Validity of the Instrument 40
3.9 Reliability of the Instrument 40
3.10 Data Analysis Technique 40
3.11 Model Specification 41
4.0 RESULT AND DISCUSSIONS 44
4.1 Analysis of demographic characteristics 44
4.1.2 Gender characteristics of respondent 44
4.1.3 Household (size) characteristics of respondents 45
4.1.4 Educational level of respondents 46
4.2 Analysis of respondents response 47
4.3 Test of Hypotheses 47
5.0 SUMMARY CONCLUSION AND RECOMMENDATION 57
5.1 Summary 57
5.2 Conclusion 57
5.3 Recommendation 58
5.4 Suggestion for Future Research 58
5.5 Contribution to Knowledge 59
REFERENCE 60
RESEARCH 66
RESEARCH QUESTIONNAIRE 67
APPENDICES 68
LIST OF TABLES
Packaging re-use on consumer perception of the brands 47
Packaging re-use of purchase intention of the brands 47
Protective function on consumer perception of the brands 48
Protective function on purchase intention of the brands 48
Packaging information on consumer perception of the brands 49
Packaging information on purchase intention of the customers 49
Result of simple regression for hypothesis 1 50
Result of simple regression for hypothesis 2 51
Result of simple regression for hypothesis 3 52
Result of simple regression for hypothesis 4 54
Result of simple regression for hypothesis 5 54
Result of simple regression for hypothesis 6 55
LIST OF FIGURES
Conceptual framework 9
Howard Seth model 28
Black-box model 29
Nicosia model 30
Age characteristics of respondents 44
Gender characteristics of respondent 44
Household (size) characteristics of respondents 45
Educational level of respondents 46
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The extreme intensity of competition in the world of today's beverage market has compelled producers and retailers to concentrate their attention on using their packaging to place their company above the competition. One can argue, if this outcome can be credited to competition or how producers react to the expectation and necessities of the consumer (Adner 2006). Making the consumer feel enthusiastic about a particular goods and services therefore arousing their interest to make purchase is an essential component of organizational success; thus it is necessary for producers and merchants to concentrate basically on consumer contentment towards their needs and wants. Some business organizations in Nigeria concentrate their marketing effort on the traditional ingredients in the marketing mix; product, price, promotion in the public presentation of their marketing activities. The world of marketing metamorphosed into an unprecedented competition sphere where companies with products to offer to the populace have to work extra-hard to survive. Such companies require they adoption of sound marketing mix so as to compete favourably (Cooper, Edgett & Kleinschmidt, 2002). In marketing mix, the basis is the product improvement in goods and services and product mix. Product arrangement matches a significant task for protection, presentation, re-use and information of consumer goods. It helps in the storage, reduces damage, loss of goods on transit and minimizes pilferage (Adner, 2006). Traditionally, packaging has been viewed as a precise useful style which is medium of guarding goods from shock as it travels over the (supply/value chain) distribution channel. However, most countries that wants to be more advanced, socially and economically are yet to explore proper product packaging to an average extent. A common illustration is market women and traders wrapping their beverages (Zobo, Kwuno, Water etc) with just waterproofs. For them packaging should serve only as container, carrier and shield against harm or discomfort (Nwaogu 2017). The need for improvement in developing nation should not be undermined. Lately, producers have the awareness of their surroundings and sensation and sees packaging as a vital determinant in product purchase decision. Manufacturers have shifted special importance attached to the fact that the exclusive intent of packaging is to preserve the content. It has been perceived by sight to the highest degree in supermarket that colour in packaging is a consumer wooing tool when there is competition.
Packaging in drink industry has developed over time from the using of bottle to cans and plastic and now have specific effect in the marketing mix of providing product information, protection and re-use of its content (Cateora and Graham, 2002). Packaging gained momentum as competitive pressure have forced companies to look objectively and critically on how to influence and persuade consumers to try its product brands. Nigeria Bottling Company PLC is predominately into soft drinks packaged with bottle, can and plastic. Poor packaging creates some health hazard due to rust associated with the cork, bottle and sometimes may lack the essential message which the consumer seek to find. The need for improved packaging is increasing fast and cannot be overstated (Firle 2015). According to Oyelola and Babatunde (2008) in a survey conducted in Lagos, “usable when empty” dominate the element of packaging, household waste packaging consist of 7.68% of plastic and 3.64% of glass. However, packaging is not solely crucial in the after use of a product or service, the success of the modern supermarket is derived primarily from the commencement of self-services. The success of the retail self-service operation at such a small net profit figure is dependent upon the movement of goods based on packaging. Packaging could be said to exist in all field of human activities. The marketing consultant, who tastefully furnishes his office, is trying to package himself and his office for acceptance by his clients. Also, the young single girl who uses cosmetics to enhance her beauty is packaging herself for greater acceptance by the wife-seeking bachelors. Obviously, packaging has and exerts influence on the consumer decisions.
This research work will focus on the beverage packaging, with Nigeria Bottling Company (NBC) as case studies. The study investigated how packaging affects consumer buying decision and to what extent it affects behaviour and the salient features that makes it a potent aspect of decision making.
1.2 STATEMENT OF THE PROBLEM
The contemporary marketing has to face some challenging situation that the commercial enterprise brings with it. Amongst them is the evolution and under performance of packaging to firms and consumers which has not yielded the expected result over the years. The situation does not only worry management but also consumers. Many management are bored to find that after spending huge sum on packaging re-use, information and protective function. They still do not gain a wider market share. To consumers, if asked would probably want the company to cut down on packaging and use the fund to grow the offering more attractive, cheaper and of higher quality. A practical approach should be properly applied to encourage consumers of the commodity. This is necessary now, so as to enhance storage, reduce damages, loss of goods while on transit and create customer satisfaction and also stimulate sales.
They study is therefore set to unravel how packaging affects consumer buying decision and to what extent it affects behavior and the salient features that makes it a potent feature in decision making.
1.3 OBJECTIVES OF THE STUDY
The main purpose of this study was to determine the effect of packaging on consumer buying decision in the soft drink industry. However, the specific objectives were to:
i. ascertain the effect of packaging re-use on consumer perception of the brands;
ii. ascertain the effect of packaging re-use on purchase intention of the brands;
iii. ascertain the effect of protective function on consumer perception of the brands;
iv. ascertain the effect of protective function on purchase intention of the brands;
v. ascertain the effect of packaging information on consumer perception of the brands;
vi. ascertain the effect of packaging information on purchase intention of the customers.
1.4 RESEARCH QUESTIONS
Key research questions for the study were;
• how does packaging re-use affect consumer perception of the brands?
• how does packaging re-use affect purchase intention of the brands?
• how does protective function affect consumer perception of the brands?
• how does protective function affect purchase intention of the brands?
• how does packaging information affect consumer perception of the brands?
• how does packaging information affect purchase intention of the customers?
1.5 RESEARCH HYPOTHESES
The following hypotheses were formulated and tested in the course of the study:
H01: Packaging re-use has no significant effect on consumer's perception of the brands.
H02: Packaging re-use has no significant effect on purchase intention of the brands.
H03: Protective function has no significant effect on consumer perception of the brands.
H04: Protective function has no significant effect on purchase intention of the brands.
H05: Packaging information has no significant effect on consumer perception of the brands.
H06: Packaging information has no significant effect on purchase intention of the customers.
1.6 SCOPE OF THE STUDY
The study determined the effect of packaging on consumer buying decision in the soft drink industry. Conceptually, the study ascertain the effect of packaging re-use on consumer perception of the brands; ascertain the effect of packaging re-use on purchase intention of the brands; ascertain the effect of protective function on consumer perception of the brands; ascertain the effect of protective function on purchase intention of the brands; ascertain the effect of packaging information on consumer perception of the brands; and ascertain the effect of packaging information on purchase intention of the customers.
Geographically, the study focused on consumers of Nigeria bottling company brands in Aba and Owerri. Methodologically, customers of NBC and 7-Up PLC who are within 18 - 50years of age constitute the respondents of the study and data were analyzed with both descriptive statistics and inferential statistics.
1.7 LIMITATIONS OF THE STUDY
During the course of this study, many variables constituted limitation to it. Among them was location of the study which bound the extrapolation of its findings. Secondly, the size of the experimental group is small; only 350 consumers which might not represent the majority of the consumers in Aba and Owerri. Thirdly, responses from the respondents which are inconsistent also constituted a limitation.
Therefore, the findings of this study may not be realistically extended to all groups of consumers.
1.8 SIGNIFICANCE OF THE STUDY
The research would be useful to both consumers of soft drinks; marketers and management. The outcome of the study would provide basis for developing appropriate packaging for consumers. With a standard packaging for consumers, the rate of dissatisfaction experienced among users would-be checked. The study would be of benefit to management (distribution/logistics) that are facing problems in making the product available to consumers The study findings would also be of assistance to future students of marketing as it would give them a starting point upon which to base their research.
It is anticipated that the study would make contributions and add useful information to that which already exists with respect to packaging and consumer buying decision. Finally, the findings would also be of use to Nigeria Bottling Company PLC.
1.9 STRUCTURAL DEFINITION OF TERMS
For the purpose of clarity, the following terms were defined;
Consumer Buying Decision: a decision made before, during and after the acquisition of commodity.
Information: instructs the user on usage, storage, recycling and disposal of the product.
Packaging: utilization of packs and constituent plus decoration or labeling to protect, contain, identify, merchandise and facilitate the use of products.
Perception: ones feelings about an issue, event or condition. In this case, the feelings of contentment or dissonance a consumer has for the product.
Purchase Intention: interest in the mind of the customer to acquire a certain product.
Protective function: serve as physical containment which keeps the product pure, fresh, barren and safe.
Re-use: an environmental aspect of packaging which demands that the user after consuming a particular goods, will put the pack to further use
1.10 ORGANIZATION OF THE STUDY
This section shows that the thesis was organised into five chapters which includes: Introduction: this thesis starts with introducing the background of the study, Statement of problem, Objective of the study, Research questions, Research hypotheses, Scope of the study, Limitations of the study, Significance of the study, Structural definition of terms, Organization of the study and Historical background of the company,
Review of Related Literatures: this section presents the conceptual framework of the study, Theoretical framework of the study, Review of empirical studies and Summary of gap in the literature. Methodology: it consist of research design, Area of the study, Population of the study, Determination of sample size, Sampling technique, Instrument of data collection, Test of validity of the instrument, Reliability of the instrument, Data analysis techniques, procedures and model specification.
Results and Discussions: this section consists of the analysis of demographic characteristics of respondents, analysis of respondents' response and test of hypotheses. Summary, Conclusion and Recommendation: it consists of summary, conclusion and recommendation of the study.
1.10.1 Historical background of Nigeria bottling company plc
Nigeria Bottling Company (NBC), the widest bottler of soft drink in Nigeria. The company launched its operations on 22nd November 1951 when it was merged with a subsidiary of A.G Leventis Group and given the concession to bottle and sell Coca-Cola products in Nigeria. In 1972, it turned to a national establishment with its shares listed on the exchange platform. NBC kicked off as a family business and has metamorphosed to a sizeable soft drink company. The company started off from a single manually operated bottling facility with a creative strength of a few dozen cases each day within Lagos. NBC presently operates 13 bottling factories with over 80 distribution storehouses, 250,000 mercantile establishments and personnel strength of over 6000 workforce nationwide. The establishment since it was founded has continued to rise above board and has continued to be the widest bottler in Nigeria and the second widest in the West African dominating average annual sales of 1.8 billion bottles up from 1.0 million cases in 1960. NBC produces and sells over 33 brands; Coca-Cola, Fanta, Sprite, Eva table water and 5-Alive fruit juice amongst others. NBC is capitalized to the tune of N65.33bn with outstanding shares of N1.31bn and account for 8.72 percent of industry market capitalization (Thisdaylive, 2016).
This company is known for considerable bottle, can and plastic packaging.
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