CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The word brand
originated from the word TO BURN, which later passed into old English as
BIERMAN and old French as BRINIER. The words quickly move from literal to
metaphorical. The practice of marking or given identification to animals led to
brand as a mark of ownership (Wells, Farley and Armstrong, 2007).
The success of any
business or consumer product depends in part on the target markets ability to
distinguish one product from another (Koll and Wallpach, 2009). Branding is the
principal instrument used by marketers and companies to distinguish their
products from that of competitors. It is regarded perhaps that, the most
distinctive skills of professional marketers is their ability to create,
maintain, protect and enhance brands. For centuries, business people have been
devising ways to identify their wares and to distinguish them from those of
competitors. Pictures were used in the early years because many potential
customers were illiterate. Meaningless product names such as Kodak as created
in 1988 by George Eastman, however, branding goes beyond just choosing a
product name. In effect, a brand can encompass a name, a phrase, a design, a
symbol or any combination of these so as to distinguish one product from
another (Koll and Wallpach, 2009). A brand name is that portion of the brand
which can be spoken, including letters, words or numbers. A brand mark is that
portion of the brand that cannot be expressed verbally, such as a graph design
or a symbol. Some of the worlds most recognize brands are Mercedes-Benz. A
brand mark is often referred to as logo, but it must be noted that a logo can
also refer to distinctive type or style such as coca- cola‟s elegant script.
Many companies offer several brands under one company name. In developing a
marketing strategy for individual products, the responsibilities rest on the
shoulders of the seller to confront the branding decision. In product strategy,
branding is one of the most important issues that must be considered (Koll and
Wallpach, 2009).
This research work
intends to identify the effect that brand (name) have on company‟s profit. It
is of great importance that companies create a name that could easily be
identified by target market and also helps to distinguish the product in
question from those of competing products. Brand is defined as name, term,
sign, symbol or combination of them, intended to identify the goods or services
of one seller or group of sellers and to differentiate them from those of
competitors (Wonglorsaichon and Sathianrapabayut, 2008).
Branding begun many
centuries before the word acquire its modern usage. The ancient Greek and
Romans had various forms of promoting their goods. Messages would be written
informing the public that this man who lived over there at this address could
make shoes or was a scribe. In the early periods, advertising and marketing in
the literal sense was done on personal basis with the name of particular
individual as important as that of his products or services. The modern
development of this can be seen in the name of a private shopkeeper over his
shop. Some of the best name chain store names have originated as that over a
single establishment. In the earliest days, shops as distinct from individuals
were quick to sell their goods by using pictures. For example, in Rome, a
butchers shop would display a sign depicting a row of hams, a shoemaker, one of
a boot. Such pictorial promotion was the forerunner of many shops which are
still familiar today. A more sophisticated and literate age has led to the use
of virtual signs and pun to suggest and suggest the brand name concerned. Since
the earliest times, producers have used their brands or marks to distinguish
their products.
In any business
organization, the choice of a brand is a very critical decision as the name
affects customers‟ image and attitude towards the product and the firm. Thus,
it is a contributing factor in making it a winner or loser in the competitive
market. This suggests that organizations should consider a number of factors
when selecting a brand name, which is one of the most difficult tasks in
marketing operations. Branding should therefore, improve the company‟s image,
boost sales and increase profits. It could therefore result into a strong and
healthy relationship between the introduction of new brands and increase on
return and investments (Asika, 2006).
This study primarily
focuses on impact of branding strategy on sales of consumer products of Coca-Cola.
This is with a view to highlighting the various branding strategies put in
place by organizations to build, sustain and enhance profitability as well as
assessing its impact on the firm.
1.2 STATEMENT OF PROBLEM
Branding is an
important issue in any organization. This is because without a proper branding
of a firm’s products, it’s difficult for the firm to run its operation smoothly
for profit. As consumer become more sophisticated, manufacturers place more
emphasis upon promoting their brands directly to consumers (rather than to
distributors) spending considerable sums on advertising the high quality of
their products thus profitability. Furthermore branding has been a major issue
especially in developing countries. As a result in order to explain the
relationship between branding and profitability in developed countries (Asika,
2006).
However, despite the above importance this
issue failed to attract the attention of researchers in Nigeria. Thus, while
searching on internet, browsing through the books and journals the researcher
didn’t find directly related research topics carried out in Nigeria (Asika,
2006).
Producers believe that
they will be less susceptible to demand from distributors for extra discount to
stock their brands. For some products (e.g.) perfumes and alcoholic drinks),
considerable effort has been devoted to promoting brands to reflect the
personality of their likely purchasers. Marketing research has indeed shown
that for these products consumers can be persuaded to buy brands that enhance
the image they have of themselves. Manufacturers believe that if they invest in
the quality of their brands they will build up a brand image to which consumers
will respond by asking for their foods by their brand names and by being
willing to pay a premium for them (Topoyan and Bulut, 2008).
Therefore the
researchers believed that the problem is almost untouched and there is a
knowledge gap on the area. It is against this background that the research
seeks to investigate whether branding adds to the profitability of
manufacturing company.
1.3 OBJECTIVE OF THE STUDY
The broad objective of
the study is to examine the impact of branding strategy on sales of consumer
products of Coca-Cola. The study also have the following specific objectives:
1. To evaluate the different branding
strategies adopted by management of Nigerian bottling company.
2. To identify the extent that product
branding has led to increased in profitability and return on investment in the
company.
1.4 RESEARCH HYPOTHESIS
H0: Branding has no
significant effect on the profitability of Nigerian bottling company.
H1: Branding of
products has a significant effect on the profitability of Nigerian bottling
company.
1.5 SIGNIFICANCE OF STUDY
This study by its
substantive examination of past literature has contributed to the richness of
the past studies. Furthermore, it has reinforced some past knowledge, updated
information in studies relating to branding and how it enhances profitability
in a manufacturing industry. However, it does not pretend to be a new
breakthrough in the frontier of knowledge. This work can be retrieved for use
by other researchers and writers particularly in related fields such as the
social science and psychology. For these stated reasons, it is hoped that the
effort and time expended on this study has been worthwhile.
1.6 SCOPE OF STUDY
The study limits its
scope on the manufacturing sector of Nigeria only and precisely on how branding
in a manufacturing sector enhances profitability (case of Nigeria Bottling
Company). Here, attempts are made to look at concept of branding, product
branding, branding strategy, effects of product branding or their significant
contribution on organizational profitability.
1.7 OUTLINES OF CHAPTERS
This study is aimed at examining
the impact of branding strategies on sales of consumer product in Coca-cola,
Kaduna. The research work, therefore, is divided in to six chapters. Chapter
one deals with general introduction which provides a background to the study,
statement of research problem, purpose of the study, significance of the study,
hypothesis, scope and limitations of study, and definition of key terms.
Chapter Two deals with literature and theoretical framework including branding
defined, Product branding, Branding Strategy, Effects of Product Branding on
Sales, Principles of Branding.
Chapter three covers
research methodology. Chapter four, deals with presentation and analysis of
data, test of hypothesis and discussion of findings. Finally, chapter five
covers summary, conclusion, recommendations and suggestion for further studies.