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.
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
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.
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.
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.