Packaging

The Purposes of Packaging

The role of packaging in marketing has become quite significant as it is one of the ways companies can get consumers to notice products.

Learning Objectives

Describe the various uses of product packaging within a branding context

Key Takeaways

Key Points

  • Considering the importance placed on the package, it is not surprising that a great deal of research is spent on motivational research, color testing, psychological manipulation, and so forth, in order to ascertain how the majority of consumers will react to a new package.
  • A common use of packaging is marketing. The packaging and labels can be used by marketers to encourage potential buyers to purchase the product.
  • Packaging is also used for convenience and information transmission. Packages and labels communicate how to use, transport, recycle, or dispose of the package or product.

Key Terms

  • marketing: The process of communicating the value of a product or service to customers.

The Purposes of Packaging

With the increased importance placed on self-service marketing, the role of packaging is becoming quite significant. For example, in a typical supermarket a shopper passes about 600 items per minute, or one item every tenth of a second. Thus, the only way to get some consumers to notice the product is through displays, shelf hangers, tear-off coupon blocks, other point-of-purchase devices, and, last but not least, effective packages. Considering the importance placed on the package, it is not surprising that a great deal of research is spent on motivational research, color testing, psychological manipulation, and so forth, in order to ascertain how the majority of consumers will react to a new package. Based on the results of this research, past experience, and the current and anticipated decisions of competitors, the marketer will initially determine the primary role of the package relative to the product. Should it include quality, safety, distinction, affordability, convenience, or aesthetic beauty?

A box of Risperdal pills that are packaged as convenient individual doses.

Packaging: For many drugs, packaging is used to protect the product, distribute information, and provide convenience.

Common uses of packaging include:

  • Physical protection: The objects enclosed in the package may require protection from, among other things, mechanical shock, vibration, electrostatic discharge, compression, temperature, etc.
  • Information transmission: Packages and labels communicate how to use, transport, recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and chemical products, some types of information are required by governments. Some packages and labels also are used for track and trace purposes.
  • Marketing: The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package graphic design and physical design have been important and constantly evolving phenomenon for several decades. Marketing communications and graphic design are applied to the surface of the package and (in many cases) the point of sale display, examples of which are shown here:.
  • Convenience: Packages can have features that add convenience in distribution, handling, stacking, display, sale, opening, re-closing, use, dispensing, reuse, recycling, and ease of disposal.
  • Barrier protection: A barrier from oxygen, water vapor, dust, etc., is often required. Permeation is a critical factor in design. Some packages contain desiccants or oxygen absorbency to help extend shelf life. Modified atmospheres or controlled atmospheres are also maintained in some food packages. Keeping the contents clean, fresh, sterile and safe for the intended shelf life is a primary function.
  • Security: Packaging can play an important role in reducing the security risks of shipment. Packages can be made with improved tamper resistance to deter tampering and also can have tamper-evident features to help indicate tampering. Packages can be engineered to help reduce the risks of package pilferage.

Packaging Considerations

In the package design stages for products, structural design, marketing, and environmental responsibility should all be considered.

Learning Objectives

Outline the design, regulatory and environmental requirements that must be addressed during the packaging development process

Key Takeaways

Key Points

  • While the development of a package (or component) can be a separate process, it should be linked closely with the product to be packaged.
  • With some types of products, the design process involves detailed regulatory requirements for the package. For example, toxicologists and food scientists need to verify that the packaging materials are permissible under applicable regulations.
  • Package development should involve considerations for sustainability, environmental responsibility, and applicable environmental and recycling regulations.

Key Terms

  • new product development: New product development (NPD) is the complete process of bringing a new product to market.

Packaging Considerations

Package design and development are often thought of as an integral part of the new product development process. Alternatively, development of a package (or component) can be a separate process, but must be linked closely with the product to be packaged. Package design starts with the identification of all the requirements: structural design, marketing, shelf life, quality assurance, logistics, legal, regulatory, graphic design, end-use, and environmental. The design criteria, performance (specified by package testing), completion time targets, resources, and cost constraints need to be established and agreed upon. Package design processes often employ rapid prototyping, computer-aided design, computer-aided manufacturing, and document automation.

With some types of products, the design process involves detailed regulatory requirements for the package. With packaging foods, for example, any package components that may contact the food are considered food contact materials. Toxicologists and food scientists need to verify that the packaging materials are permissible under applicable regulations. Packaging engineers need to verify that the completed package will keep the product safe for its intended shelf life with normal usage. Packaging processes, labeling, distribution, and sale need to be validated to comply with regulations and to ensure they have the well-being of the consumer in mind.

Package design may take place within a company or with various degrees of external packaging engineering: independent contractors, consultants, vendor evaluations, independent laboratories, contract packagers, or total outsourcing. Some sort of formal project planning and project management methodology is required for all but the simplest package design and development programs. An effective quality management system and verification and validation protocols are mandatory for some types of packaging and recommended for all.

Environmental Considerations

Package development involves considerations for sustainability, environmental responsibility, and applicable environmental and recycling regulations. It may involve a life cycle assessment which considers the material and energy inputs and outputs to the package, the packaged product (contents), the packaging process, the logistics system, and waste management. It is necessary to know the relevant regulatory requirements for point of manufacture, sale, and use. The traditional “three R’s” of reduce, reuse, and recycle are part of a waste hierarchy which may be considered in product and package development.

A package of Andes mints.

Wasteful Packaging: Extra paperboard is used to exaggerate the size of the package. It’s also an example of wasting natural resources.

Environmental considerations include:

  • Prevention – Waste prevention is a primary goal. Packaging should be used only where needed. Proper packaging can also help prevent waste. Packaging plays an important part in preventing loss or damage to the packaged-product (contents). Usually, the energy content and material usage of the product being packaged are much greater than that of the package. A vital function of the package is to protect the product for its intended use: if the product is damaged or degraded, its entire energy and material content may be lost.
  • Disposal – Incineration, and placement in a sanitary landfill are needed for some materials. Certain states within the US regulate packages for toxic contents, which have the potential to contaminate emissions and ash from incineration and leachate from landfill. Packages should not be littered.
  • Energy recovery – Waste-to-energy and refuse-derived fuel in approved facilities are able to make use of the heat available from the packaging components.
  • Minimization – (also known as “source reduction”) The mass and volume of packaging (per unit of contents) can be measured and used as one of the criteria to minimize during the package design process. Usually “reduced” packaging also helps minimize costs. Packaging engineers continue to work toward reduced packaging.

Packaging Strategies

Packaging enables a marketing team to highlight key product attributes, qualifiers, and branding images to capture strategic value.

Learning Objectives

Describe the various strategies and objectives a marketing team can employ to capture value through effective packaging

Key Takeaways

Key Points

  • Packaging fulfills a variety of strategy purposes across a number of disciplines, including legal, marketing, and operational objectives.
  • From a marketing perspective, there are quite a few useful strategies and outcomes to keep in mind when designing a product ‘s packaging.
  • Communicating the core attributes and value of the product, alongside building brand awareness and brand recognition, helps to manage the expectations of consumers and build brand loyalty.
  • Using symbols and icons, particularly from verifying third parties, can be a useful strategy for packaging.
  • Co- branding is also a useful packaging strategy that enables two or more firms to utilize their brand equity to drive behavior on a product to which each firm adds value.

Key Terms

  • Brand Recognition: The ability for a given consumer to associate a product with a brand immediately upon seeing it.

Packaging is a significant issue from a strategic perspective, with impacts ranging from the first impression consumers will have to environmental policy to cost-cutting. How a firm packages a product is therefore a key topic across various disciplines, with the potential to increase revenues, decrease costs, and maintain alignment with environmental policies and legislation.

A pyramid diagram that shows the packaging waste hierarchy from least to most favored - disposal, energy recovery, recycling, reuse, minimisation, and prevention.

Packaging Waste Hierarchy: Through utilizing minimal and reusable packaging, costs can be lowered while consumers receive the value of having less of a negative impact on the environment.

Packaging Strategies

From the marketing perspective, packaging strategies can have a significant impact on brand awareness, brand recognition, expectations management, and as a conduit of information between the organization and the user. Marketing, branding, and packaging must align on messaging, value proposition, and communication to accomplish the following:

Value Proposition

The primary purpose of packaging from a marketing perspective is to underscore why a user would purchase a given product. This could be extremely simple, such as a description of what the product is. This could also be emotional, communicating what the product stands for. For example, perhaps an informed consumer wants to buy locally sourced food. A smart marketing strategy for organizations focused on local production would be to highlight this in big letters on the package.

Brand Recognition

Another important purpose of packaging for marketers is the capacity for building recognition of the brand. When you see a red can of soda with cursive writing, you almost immediately associate it with Coca-Cola. This is strategic on behalf of the company. It builds recognition, which can lead to loyalty.

Brand Awareness

Slightly different than recognition, building brand awareness is all about the opportunity to be memorable. Creating packaging that will draw the attention of a consumer will increase that brand’s ability to convert the customer both in this instance, and in later instances. For consumers, their attention is a much desired commodity for organizations. Packaging is an opportunity to accomplish this.

Expectations

A key component of effective marketing is ensuring the consumer gets what they expect (and preferably a bit more). This way, the association of the consumer is a positive one when considering the organization, relative to what they had expected. Packaging allows for simple strategies in this regard, such as stating on the package that batteries aren’t included, or that a given accessories isn’t compatible with certain types of smartphones.

Co-branding

Another interesting and useful strategy within packaging is co-branding. Simply put, organizations often collaborate, and can benefit from sharing this collaboration. Ben and Jerry’s ice cream uses a ton of different ingredients, many of which may be another organization’s brand. Heath bar in Ben and Jerry’s, for example, could be co-branded on the package.

Symbols and Icons

Packaging is a visual representation of a product, and can benefit from established and trustworthy markings of certain attributes. For example, a 100% organic symbol on a box of cereal would indicate to the user that an external third party verified and approved of the cereal manufacturer’s production process. Using recognizable symbols and icons can build trust between the organization and the consumer.

Product Labeling

Labels serve to capture the attention of shoppers as well as provide useful information regarding the product.

Learning Objectives

State what information and symbols are generally included on product labels

Key Takeaways

Key Points

  • In some countries, many products, including food and pharmaceuticals, are required by law to contain certain labels such as listing ingredients, nutritional information, or usage warning information.
  • Labels are attached on the product package to provide information such as manufacturer of the product, date of manufacture, date of expiry, its ingredients, how to use the product, and its handling.
  • Some labels include symbols to show product certifications, trademarks, or proof of purchase. These symbols exist to communicate aspects of consumer use and safety.

Key Terms

  • The Fair Packaging and Labeling Act: The Fair Packaging and Labeling Act is a US law that applies to labels on many consumer products. It requires the label to state:The identity of the product;The name and place of business of the manufacturer, packer, or distributor;The net quantity of contents;The contents statement must include both metric and US customary units.

Labels serve to capture the attention of shoppers. The use of catchy words may cause strolling customers to stop and evaluate the product. The label is likely to be the first thing new customers see and thus offer their first impression of the product.

Labels are Descriptive

A label is a carrier of information about the product. The attached label provides customers with information to aid their purchase decision or help improve the experience of using the product. Labels can include:

  • Care and use of the product
  • Recipes or suggestions
  • Ingredients or nutritional information
  • Product guarantees
  • Manufacturer name and address
  • Weight statements
  • Sell by date and expiration dates
  • Warnings

Symbols Used in Labels

Many types of symbols for package labeling are nationally and internationally standardized. For consumer packaging, symbols exist for product certifications, trademarks, and proof of purchase. Some requirements and symbols exist to communicate aspects of consumer use and safety. For example, the estimated sign notes conformance to EU weights and measures accuracy regulations. Examples of environmental and recycling symbols include the recycling symbol, the resin identification code, and the “green dot.”

Labeling Laws

image

Recycled Material Label: Laws were passed in the United States to inform consumers as to whether the products they were buying contained new or recycled materials.

In some countries, many products, including food and pharmaceuticals, are required by law to contain certain labels such as ingredients, nutritional information, or usage warning information (FDA). For example, a law label is a legally required tag or label on new items describing the fabric and filling regulating the United States mattress, upholstery, and stuffed article industry. The purpose of the law label is to inform the consumer of the hidden contents, or “filling materials” inside bedding & furniture products. Laws requiring these tags were passed in the United States to inform consumers as to whether the stuffed article they were buying contained new or recycled materials. The recycling logo needed to be displayed on the label. The Fair Packaging and Labeling Act (FPLA) is a law that applies to labels on many consumer products that states the products identity, the company that manufactures it, and the net quantity of contents.

Product Warranties

Support services, such as product warranties, are a great way for a company to distinguish itself from its competitors.

Learning Objectives

Describe how warranties and money-back guarantees act as supporting services for products

Key Takeaways

Key Points

  • Behind every product is a series of supporting services, such as warranties and money-back guarantees. In many instances, such services may be as important as the product itself.
  • Warranties are used to mitigate the risks of a malfunctioning product or the risk of making a wrong purchase decision regarding misinformation about a product.
  • A money-back guarantee, also know as a “satisfaction guarantee,” is a simple guarantee that if a buyer is not satisfied with a product or service, a refund will be made.

Key Terms

  • Warranty: an assurance by one party to the other party that specific facts or conditions are true or will happen; the other party is permitted to rely on that assurance and seek some type of remedy if it is not true or followed

Behind every product is a series of supporting services, such as warranties and money-back guarantees. In many instances, such services may be as important as the product itself. In fact, at times it is difficult to separate the associated services from the product features.

Companies must constantly monitor the services offered by the company and its competitors. Based on the results of data-gathering devices such as customer surveys, consumer complaints, and suggestion boxes, the product manager can determine the types of services to offer, the form the service will take, and the price charged. For example, consumers are very reluctant to purchase a stereo that can be serviced only by sending it to the factory, and paying the postage and a high service fee. Maytag, however, has been very effective in selling their appliances with service contracts and local repair. Although there are a wide range of supportive services, the following are most prevalent:

Warranty: Warranties are used to mitigate the risks of a malfunctioning product or the risk of making a wrong purchase decision regarding misinformation about a product. There are several types of durable products, retail stores, and even service products for which warranties are expected. These warranties can provide a wide array of restitution, with a very limited warranty at one end of the continuum and extended warranties at the other. An example of the former is a VCR manufacturer that provides a 30-day warranty on the motor drive and no other coverage. The Craftsman tools division of Sears Roebuck reflects the other extreme. A broken shovel will be replaced, no questions asked, after a full summer of use. A good jewelry store has a warranty backing up every diamond ring it sells. A warranty is violated when products do not perform as expected (are defective) at the time the sale occurs. In this case, sellers should honor the warranty by offering a refund or a replacement.

A photo of the pamphlets and CDs that come with an Apple product as part of the warranty.

Warranty: AppleCare covers both global parts and labor repair coverage for the device, along with phone/Internet technical support for questions about Apple hardware and software.

Money-back guarantee: The ultimate warranty is the money-back guarantee, also know as a “satisfaction guarantee. ” Essentially, it is a simple guarantee that if a buyer is not satisfied with a product or service, a refund will be made. To the customer, a money-back guarantee reduces risk almost totally. There are certain market segments (e.g., low risk takers) that perceive this service as very important. This service is effective only if the product is superior and the product will be returned by only a few people. In some case, companies will try to get out of money-back guarantees. There are many ways a customer can take action to pressure a company to stick to its advertised guarantee. The first should always involve contacting the company by means that are recorded, in order to maintain a thorough record of all communications regarding the guarantee. If the company still fails to follow through with its guarantee, the buyer may contact his or her state’s attorney general, the seller’s state attorney general, the Better Business Bureau, or the Federal Trade Commission (FTC).

Problems with Packaging

Many of the problems in packaging can be related to issues regarding labels, graphics, safety, and the environment.

Learning Objectives

Discuss the ethical issues that commonly arise in product packaging and labeling

Key Takeaways

Key Points

  • Marketers can use label information to mislead consumers by providing false information to exaggerate the attributes of their product.
  • There are many cases in which marketers use pictures in packaging that do not represent the actual product.
  • Some marketers label their products as environmentally friendly even though the products don’t actually have environmentally friendly attributes.

Key Terms

  • ethics: The moral principles that guide decision making and strategy.

Problems With Packaging

Packaging is a crucial element in the marketing of a product, as it is essentially the casing that the produt comes in. So after all the advertising and promotion, when customers go to the store and pick up the product, it is only the packaging that they see, smell, and touch. It is thus extremely important for the marketer to ensure that potential customers like what they see. The packaging should be appropriate to the product, and induce customers to buy it.

Unfortunately, ethics play a large role in the problems with packaging and labeling. Many of the ethical issues are related to the environment, labels, graphics, and safety. Packaging needs to provide a certain amount of information to the consumer, depending on the type of product. For instance, a beverage needs to provide information on the product name, its size, and its nutritional content. In contrast, the packaging of a toy needs to provide the age range suitable for children to play with it.

In packaging, the most common issues that arise include:

Problems With Label Information

Sometimes marketers use label information to mislead consumers by providing untrue information to exaggerate the attributes of their product. Labels that display nutrition information like low fat, fat free, cholesterol free, and 100% pure juice are examples.

Cartons of fat free Half&Half.

Misleading Labels: Often, products have words such as “fat free,” “low-fat,” or “organic” on the labels. The labels could mislead the customer into thinking something that may not be the case.

Problems With Packaging Graphics

There are many cases in which marketers use pictures in packaging that do not represent the actual product. For example, packaging may make a certain product look nice and attractive, but the actual product may not be as good as depicted once opened. In addition, some store brands or other small brands try to imitate the way big brands package their products. This leads to confusion among consumers.

Problems With Packaging Safety

Consumers are concerned with packaging safety issues, especially when it comes to products for children. Marketers should avoid unsafe packaging that uses high ingredients of chemicals that are unsuitable for young children and are not tamper-proof.

Problems With Environmental Issues

Some marketers tend to label their products as environmentally friendly. However, the products actually do not have environmentally friendly attributes. For example, degradable trash bags actually remain intact for decades in a landfill. Packaging and labeling also produce a lot of excess waste that just gets thrown out once the consumer has purchased the product. In addition, the work that goes into producing the packaging and labeling is wasted once the consumer has purchased the product. It goes into the trash and is never seen of or thought of again.

Global Considerations in Branding and Packaging

At the global marketing level, a company needs to launch appropriate marketing plans so results can be achieved across multiple countries.

Learning Objectives

Discuss how language, colors, customs, aesthetics, and placement affect global branding and packaging in products

Key Takeaways

Key Points

  • Language differences cause many problems for marketers in designing advertising campaigns and product labels. It is important to double-check the translation of a marketing campaign to make sure the meaning being conveyed in another language is the company’s intended message.
  • Colors also have different meanings in different cultures. Marketers should pick country-appropriate colors to make sure the local consumers are not offended or pushed away from the product due to colors used in the packaging.
  • All cultures have their own unique set of customs and taboos. It is important for marketers to learn about these so that they will know what is acceptable and what is not for their marketing programs.

Key Terms

  • global marketing: Global marketing is marketing on a worldwide scale, reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.
  • dialects: A variety of a language that is a characteristic of a particular group of the language’s speakers. The term is applied most often to regional speech patterns.
  • economies of scale: The cost advantages that an enterprise obtains due to expansion. As the scale of output is increased, factors such as facility size and usage levels of inputs cause the producer’s average cost per unit to fall.

Global Marketing Plans

Ultimately, at global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.), it is impossible to launch identical marketing plans worldwide. When branding and packaging for international products, careful consideration must be placed on factors such as language, colors, customs, aesthetics and placement.

Language

The importance of language differences cannot be overemphasized. There are upwards of 7,000 languages in the world. These differences cause many problems for marketers in designing advertising campaigns and product labels. Language problems become even more serious once the people of a country speak several languages. For example, in Canada, labels must be in both English and French, like this ad for Pepsi in Canada. In India, there are over 200 different dialects, and a similar situation exists in China.

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Pepsi Ad in Canada: In Canada, all product labels must appear in both official languages: English and French.

Colors

Colors also have different meanings in different cultures. For example, in Egypt, the country’s national color of green is considered unacceptable for packaging, because religious leaders once wore it. In Japan, black and white are colors of mourning and should not be used on a product’s package. Similarly, purple is unacceptable in Hispanic nations because it is associated with death.

Customs and Taboos

All cultures have their own unique set of customs and taboos. It is important for marketers to learn about these so that they will know what is acceptable and what is not for their marketing programs.

Aesthetics

The term aesthetics is used to refer to the concepts of beauty and good taste. The phrase, “Beauty is in the eye of the beholder,” is a very appropriate description for the differences that exist between cultures. For example, Americans believe that suntans are attractive, youthful, and healthy. However, the Japanese do not. These key differences apply to labels and branding as well.

Placement

How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the product’s position in the market place. For example, a high-end product would not want to be distributed via a “dollar store” in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique.

Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that success is how economies of scale are maximized.