THE IMPACT OF BRANDING IN ENHANCING PROFITABILITY IN MANUFACTURING SECTOR

Abstract

This study is on the impact of branding enhancing profitability in manufacturing sector. The total population for the study is 200 staff of Dangote group of company in Lagos. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made of human resource managers, IT personel, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

 CHAPTER ONE

INTRODUCTION

• Background of the study

The success of any business or consumer product depends in part on the target markets ability to distinguish one product from another. 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. 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 world’s 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. Hermanson (1989) defines profitability as the organizations’ capacity to create income while its incapability to create income is a loss. The key measures of profitability are the gross profit margin, net profit margin, return on total assets and return on common stockholders’ equity. Profitability growth improvement is paramount for firms, especially manufacturing firms; it assists the firms to ensure their sustainability as going concerns, stakeholder returns are also safeguarded and enhanced, and so on. Gross profit margin is defined as every dollar of sales left over after paying the cost of goods sold. An organization ought to compare its gross margin to that of the industry because a gross margin higher than industry means the organization is financially healthy .Net profit margin is the percentage of sales net of all costs incurred during production and distribution have been deducted. The net profit margin helps gauge the overall success of an organization. A high net profit margin means that an organization takes time to calculate the cost of production before setting the prices and it is also exercising good cost control. An organization should also compare its results with organizations within the same industry, because they are all subject to the same external environment and customer base, and the cost structures may be the same.