THE EFFECTS OF BRANDING ON SALES PERFORMANCE OF

FAST MOVING CONSUMER GOODS IN GHANA

1.1 Background to the study

Branding of fast moving consumer goods has occupied an important place in the arena of
marketing strategies. The advent of globalization has given birth to intense competition in
today’s business environment thus making branding the cog of differentiation in consumer
goods. Indeed, during the past two decades it has become evident that branding is the most
important asset of producers of fast moving consumer goods (Nijssen, 1999). According to
Davis (2002), the most powerful corporations in the world have all had success related to their
strong brands.

There is a clear difference between producers of fast moving consumer goods in developed and
developing countries. Whereas firms in developed countries operate under the societal marketing
concept, whose main tenets are satisfying customer needs and wants using environmentally
friendly methods, the latter operate either under the product and production concepts (Chimboza
and Motandwa 2007). Clearly, firms in developing countries mostly produce goods with little
consideration for consumer needs, wants and aspirations.

Successful brands are known to create and articulate the sustainable differential advantage of the
underlying product (Ward, 2004). The concept of “branding” a product began as early as the
sixteenth century (Chimboza and Motandwa 2007) and since those early times, building and
maintaining strong brands have been the hallmark of all successful companies. According to
Kohli and Thakor (1997) the essence of brands is underpinned by three main reasons: new
product introductions are expensive, the marketplace is crowded and successful brands have a
long life span over which they provide higher returns.

Building the right relationship between the brand and its customers will certainly create
successful brands. Brands with the greatest equity are the most profitable because their
customers are generally more loyal and willing to pay higher prices for the product, and have a
closer relationship with the brand (VNU Marketing Information Services, 2003). Besides,
branding clearly has advantages for the manufacturer and the retailer, since it helps to
differentiate the product from the competitor’s product. Further, economies of scale and scope
are attributed to branding, and a brand with high sales will generate production economies
(Chimboza and Motandwa 2007). According to a study by Murphy (2007) brand loyalty is
becoming more important as most customers are satisfied by buying the brands they trust.

Studies in some sectors have shown that customers who are ‘most loyal’ to a brand will pay as
much as a 20% premium before they will switch to a different company’s product (Chimboza
and Motandwa 2007). A clear understanding of the effects of branding on the performance of
fast moving consumer goods will ensure that branding efforts by companies are synchronized
with the needs of local consumers of fast moving consumer goods.
1.2 Problem Statement

Today, huge amounts of money are invested in creating a strong brand image and on attracting
customers with advertisements (Nordfält, 2007). Branding creates a visual impression on
consumers which makes them to readily identify a particular brand and its associated quality.
Besides, certain brands are also easily recognized and accepted by customers and their
subsequent patronage and loyalty. However, to gauge the effects of branding on the consumption
patterns and subsequent sales of various brands in urban areas of developing countries like Ghana has
been a problem. This research will be interrogated by this study.

There are many well-known multinational companies such as Coca Cola, Unilever, Cadbury to
mention but a few which sell retail products and has succeeded in creating a world known brands of
their own. These brands are intended to represent quality, design and innovative thinking, however,
how the concept of brand is transferred through the retail outlets to the final consumer and the impact
have been the missing dimension which this research intends to find out.

Further, retail outlets such as shopping malls, super and hypermarkets have made Ghanaians who
live in urban areas to become accustomed to shopping for fast moving consumer goods at such
markets and shopping malls. Besides, many wayside table-top operated sales of fast moving
consumer goods with many brands dotted all over the city have also added to easy accessibility
of fast moving consumer goods. These have led Ghanaian’s consumer lifestyle to evolve over
time. However, other factors such as rising cost of living, poverty, affluence, educational levels
and other demography factors have contributed to consumer loyalty towards a brand.

Besides, the glut of different shades of brands of various consumer goods have seen a keen
competition where some brands of consumer goods are not doing well in terms of sales in the
urban markets in Accra . This development has therefore, prompted an investigation to assess the
effects of branding on consumer goods in terms of how well consumers recognize and accept
them (brand familiarity) and the real (such as lower cost and superior quality) or intangible (such
as company reputation) competitive advantages which they possess and ascertain the underlying
influences.

1.3 Research Aim

The broad aim of this study is to examine how the concept of branding has affected the sales
levels of fast moving consumer goods in the Greater Accra Region
1.4 Specific objectives of the Study
The objectives are:

1. To assess the relationship between brand awareness and loyalty of fast moving consumer
goods ,

2. To identify the importance of brand attributes which are most important to the consumers of
fast moving consumer goods,
3. To determine the relationship between brand label and the frequency of purchases of fast
moving consumer goods.

1.5 Research hypotheses

The following propositions will be tested by the study:

H0(a): There is no relationship between brand awareness and loyalty of fast moving consumer
goods

H0(b): Brand attributes are not important to consumers of fast moving consumer goods,

H0(c): There is no relationship between brand label and frequency of purchases of fast moving
consumer goods

1.6 Significance of the study

Customers always have information about the quality of the brand of products they choose to
exchange money for. They are satisfied where the quality of the brand commensurates with the
price paid. If a brand consistently fails to meet consumer expectation and satisfaction, the brand
will be abandoned by the consumers. The difficult part of this is that consumers do not just walk
away quietly, but tell others about the poor nature of the brand. A way to avert this situation is
what the current study seeks to do.
Branding has advantages for the manufacturer and the retailer, since it helps to differentiate the
product from the competitor’s product. Economies of scale and scope are attributed to branding,
and a brand with high sales will generate production economies. Studies in some sectors have
shown that customers who are ‘most loyal’ to a brand will pay as much as a 20% premium
before they will switch to a different company’s product. A clear understanding of the factors
affecting brand preference is critical to ensure that branding efforts by the company are
synchronized with the needs of local consumers of consumer goods

With the increasing competition within the consumer goods market in Ghana, it is not just
enough rely on a brand name but rather make sure the quality of the brand is compromise in
order to dazzle the consumer. This will ensure repeated transaction which will eventually affect
the much needed philosophy of business – profit. This could be achieved through ascertaining
the effects that brands have on performance of fast moving consumer goods.
The findings of the study it is hoped will help policy makers in the consumer goods market to
improve their brands and formulate policy interventions that will relate brand features to easy
sale of such consumer goods.

1.7 Methodology
1.7.1 Research sites
The research will be carried out in Accra central market (Makola), Accra Shopping Mall and 37
Bus Terminal. The study areas cover high-density areas, where various consumer goods are
mainly sold. These sites were chosen since they constitute the main market areas and retail
outlets. Fast moving consumer goods are widely available in various retail outlets making it
possible to assess this market.

1.7.2 Sampling frame

The sampling frame consists of all members or elements of a given population (Higson-Smith,
1995). In this analysis, the sampling frame consisted of all consumers in the Greater Accra
Metropolis since they represent the target market for fast moving consumer goods.

1.7.3 Sample size

Generally, the larger the sample size the more likely the responses will reflect the true picture of
the population under study according to the Central Limit Theorem. A small sample, however,
can often provide highly reliable findings depending on the sampling procedures adopted
(Schiffman and Kanuk, 2000). A sample size of 40 individual consumers in Makola, and 30 each
in Accra Shopping Mall and 37 Bus Terminal Area is anticipated to form a total of 100
respondents for this study. This sample size was reached regarding the existing resources for the
exercise.

1.7.4 Sampling technique

A combination of Purposive and Simple Random Sampling techniques will be employed. Forty
respondents will purposely be selected from Makola market on random basis for the interview
since the area has 200,000 floating shoppers and sellers each single day (AMA Annual Report
2006) At the Accra Shopping Mall, mall intercept interviewing will be used to garner data from
30 shoppers as they move out of the mall. The same technique will be applied in the 37 Bus
Terminal for another 30 respondents.
1.7.5 Data collection

1.7.5.1 Primary data and research instrument

The primary instrument for data collection in this research will be a semi-structured
questionnaire, which will contain a mixture of closed ended and open-ended questions.
According Boyd et al. (2004) the questionnaire method has advantages in terms of versatility of
the method as well as speed and cost. However, it may have disadvantages as a result of
unwillingness of respondents to provide information, inability of respondents to provide
information and influence of the questioning process.

A Likert scale is a common type of attitude scale that will be used in this research. Respondents
will be presented with a list of brands or attributes for which they will be asked to indicate their
relative feelings or evaluations. The researchers will employ a four-point Likert scale ranging
from 1-extremely important, 2-important, 3-slightly important and 4-not important. Pre-testing of
the questionnaires will be done by conducting a small pilot survey in Tema Evergreen Shopping
Mall to pick any questionnaire administration problems using 25% of the target main survey
sample size.
The questionnaire will be completed with the help of all the group members within one week
period with the intention of gathering detailed information which will help contribute to the
successful outcome of the research study. The items on the questionnaire will be compiled from
each section and sub-section of the literature.
1.7.5.2 Secondary data
Secondary data will be obtained through extensive review of written documents, which will
include but not limited to articles in newspapers, textbooks, articles on the internet and
publications.
1.7.6 Data analysis
Primary data (mainly quantitative) generated by the study will be cleaned to ensure consistency
and transcribed in coded form (pre and post-coded) into the computer using the Statistical
Package for Social Scientists (SPSS). The statistical software package SPSS Version 11.5 as well
as Microsoft Excel will be used to analyze the data to obtain descriptive statistics mainly in the
form of frequencies and percentages. For the statistical analysis, cross tabulation will used.
Quantitative and qualitative data from semi-structured will be analyzed within the framework of
the objectives and hypotheses. For discussion of results, tables and graphs will be used to present
the data. The study will also use bi-variate technique to test the hypotheses. This technique will
be employed to examine variables considered to be of relevance. This will be made with 99%
level of confidence i.e., p= 0.01. The discussion of the major findings will be done according to
the objectives of the study.

1.8 Organization of the study

The study will be structured into five main chapters. Chapter one will focus on the general
introduction, giving background to the study, the research problem, the objectives, research
hypotheses and significance of the study.
Chapter two will represent a review of literature on the subject matter and explanations of the
various concepts and theories involved in the study.
Chapter three mainly will feature methodology that will be used for the study and the various
statistical tools and techniques used.
Chapter four takes up analysis of field data in matrix and descriptive forms and the various
analytical tools that were used in the analysis.
Finally, chapter five gives a summary of the study, conclusion and recommendations

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