Effects Of Packaging And Branding On Customers Marketing Essay

Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of packages. Packaging contains, protects, preserves, transports, informs and sells. Consumers pay a lot of attention on product quality and its usability but they also enjoy the package design of a product when purchasing a certain commodity.

Packaging of a product is more than a medium of protection and storage and it plays a vital role for a consumer when buying a product. Packaging is the most important factor. Packaging elements like Packaging color, Background Image, Packaging Material, Font Style, Design of wrapper, Printed Information and Innovation is taken as important factors in selling a product. Packaging performs a vital role in marketing communications particularly in the point of sale and could be treated as one of the most important factors influencing a consumer’s purchase decision.

1.2 Purpose of Packaging

Brand Identification: Packages contributes to immediate identification of the company’s brand.

Physical protection: The objects enclosed in the package may require protection from other things, shock, vibration, temperature, etc.

Marketing: The packaging can be used by marketers to persuade potential buyers to purchase the product. Package design has been an important and continuously developing phenomenon for several decades.

Convenience: Packages can have features which add convenience in distribution, handling, stacking, display, sale, opening, reclosing, use and reuse.

1.3 Types of packaging:

Transport packing: The product entering in to the trade need to be packed well enough to protect against loss damage during handling, transport and storage.

Consumer Packing: This packaging holds the required volume of the product for ultimate consumption and is more relevant in marketing for e.g. beverages, tobacco etc.

1.4 Labeling

Labeling is a written, printed or graphic matter upon any product, containers or wrappers. It is a subset of packaging. All the sellers need to label their products if they want to make sure that consumers purchase their products. The label can be a simple tag attached to the product or a designed graphic that is a part of the package.

A label might carry only the brand name or a great deal of information (Kotler, 2001). A label is a point of contact between the producer and the purchaser and it is an integral part of producers marketing plan.

1.5 Purpose of Labeling

Brand Identification: The label identifies the product or brand.

Product Grading: The label might also grade the product like canned fruits are grade labeled as A, B and C.

Product Description: The label describes the product that made it, where it was made, when it was made, what it contains, how it is to be used and how to use it safely.

Product Promotion: The label might promote the product through attractive graphics and designs.

1.6 Labeling Decisions

Brand Name:

It is necessary for the label to contain the brand name. It has to be decided that how should that brand name appear on the product. It is advisable to scale the logo as large as possible in keeping with the overall design9.

Label Text, Graphics and Design:

Text, graphics and design on the label must be carefully selected because label in as important part of branding process. It plays a role in communicating the image and identity of a company.9

Features and Benefits

Listing products key benefits on its label helps support the brand promise and can help differentiate the product from others, while reaching out to customers seeking those particular benefits.9

Instructions for Use

Listing products key benefits on its label helps support the brand promise and can help differentiate the product from others, while reaching out to customers seeking those particular benefits.9

Package Inserts

Package inserts, which may contain instructions for using a product, are made when the information cannot fit on the product itself. 9

Safety Hazards

Possible dangers that could result from misusing a product must be identified on products to reduce liability and comply with regulations9.

Nutritional Labeling- A case of Food Products

Nutritional labeling should clearly state the amounts of protein, fat, carbohydrates and calories contained in products, as well as their vitamin and mineral contents9.

Additional Labeling:

Additional labeling includes open dating (to describe freshness), unit pricing (to state the product cost in standard measurement units), grade labeling (to rate the quality level), and percentage labeling (to show the percentage of each important ingredient) 9.

Labeling Laws:

Labels must comply with local or international truth-in-packaging-and-labeling laws, as well as regulations on hazard warnings and other declarations9.

1.7 Product Labeling

An important aspect of marketing and selling a company’s product is the product label. The product label is very important not only for selling a product but also for communicating to the consumer information, company image, values and the perceived value of the product. Therefore when a company designs a label it must take some factors into consideration that should meet with federal regulations.

1.7.1 Specific label Information

Some products can be identified effectively by brand name or even the logo many require more complete identification of their nature and the use of the product. The purpose of the label is to provide useful and relevant information about the product as well as to help market the product. Processed foods, patented drugs, textiles and numerous other products are required by law to carry a fairly complete list of their ingredients. This specific information is extremely important so that consumer like those who are allergic to certain ingredients do not use a certain product that may harm them.

Labels today also include unit pricing, open dating and nutritional labeling.

Unit pricing shows the price per unit of weight or volume allowing consumers to compare values among competing products comparing an expensive brand name product to a less expensive generic product with similar ingredients. Unit pricing is most often found on the store shelf rather than on the product package10.

Open dating informs consumers about the expected life of the product so they can avoid products that may be spoiled. This information is especially important for such perishable items as milk, eggs and other products with a short shelf life. 10

Nutritional labeling specifies the amount of calories, total fat, cholesterol, sodium, minerals, vitamins and protein in processed foods.10

Most companies also use three types of other labels on their products.

Grade label identifies the quality of the product by a letter such as “grade A” or with a word such as “prime.” 10

An informative label uses phrases such as “Keep refrigerated after opening” to help consumers use the product appropriately. 10

Descriptive label describes the benefits or positive attributes of the product.10

1.7 Role played by Labeling

According to Padberg (1992) labeling is aimed to provide a sort of identity card of the product. It is used to make the information of a product immediately accessible to consumers when making purchase decisions. It is a tool through which consumers are provided set of data like expiry date, preservation procedures environmental impacts etc.

Labeling is aimed to achieve three main objectives.

To guarantee proper and accurate information of product safety and healthiness.

To protect consumers and manufacturers against any deceitful message.

To favor a fair competition amongst the firms operating on the market place.

Further Padberg (1992) said labeling performs a number of functions; the most important of them is a direct support to consumers in their purchasing decisions.

Labels must include the following details:

Sales denomination.

List of ingredients.

Minimum preservation time or expiry date.

Name and location of the manufacturer or packager.

Danger symbols and indication of danger involved in the use of the substance.

Location of the manufacturing plant and packaging plant.

Procedure to preserve and use the product when specific instructions have to be followed.

Instructions for use, if required.

Place of origin as the lack of this information might mislead buyers as to the origin of the product.

1.8 Consideration while Labeling

For many businesses Labeling is a suitable and straight way of providing consumers with product information. The amount and type of information which must be included in a product label can sometimes be confusing.

Labeling standards will depend on the type of product you sell, manufacture, export/import, supply etc. It is also vital you understand the regulations and responsibilities you need to stick on to regarding labeling standards. Labeling information standards impact a range of industries, from those businesses in the food industry, retail areas and manufacturing through to clothing and textile industries and importing and exporting etc.

The level of information legally required will depend on the product. For instance food products have different requirements to that of clothing or cosmetics. Basically, a label must include ample information so that consumers know exactly what they are getting and can make an informed decision. Most importantly, the information must not be deceptive or misleading.

One of the reasons why the regulations are enforced is because labeling information is often the primary means by which a consumer will decide to buy one product over another. Essentially, product labeling serves three main purposes:

It provides basic product information to consumers such as the key ingredients, quantity, quality, name and address of responsible manufacturer, dealer or importer, durability of product, instructions for use/care and country of origin.

It provides health, safety and nutrition information and warnings such as instructions for safe handling, nutritional profile, storage, use-by dates etc.

It provides a marketing vehicle for promotions advertises and promotes the product etc. In general many small businesses may not have to deal directly with product labeling standards. The labeling responsibilities will rest with the suppliers or manufacturers of the products they sell. However while it may not be a small business’ responsibility to label the products business owners still need to ensure the products are labeled correctly for their customers safety.

1.9 Fast Moving Consumer Goods (FMCG)

Fast Moving Consumer Goods (FMCG) are products that have a quick shelf turnover at relatively low cost and don’t require a lot of time and financial investment to purchase. However the huge number of goods sold is what makes the difference. Hence profit in FMCG goods always translates to number of goods sold. Fast Moving Consumer Goods is a categorization that refers to a wide range of regularly purchased consumer products including: toiletries, soaps, cosmetics, teeth cleaning products, shaving products, detergents, and other non-durables such as glassware, bulbs, batteries, paper products and plastic goods such as buckets. Fast Moving is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. The category may include pharmaceuticals, consumer electronics and packaged food products and drinks although these are often categorized separately.

The term Consumer Packaged Goods (CPG) is also known as Fast Moving Consumer Goods (FMCG). Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestle, UNILEVER and Procter & Gamble. FMCG products includes soft drinks, tissue paper, chocolate bars etc. The FMCG segment represents consumer goods required for daily or frequent use. The main segments of this sector are personal care (oral care, hair care, soaps, cosmetics, and toiletries), household care (fabric wash and household cleaners), branded and packaged food, beverages (health beverages, soft drinks, staples, cereals, dairy products, chocolates, bakery products) and tobacco.

1.10 Problem

The research is basically conducted so as to find the attitude of consumers towards labeling strategies over products that changes their purchase decision.

1.11 Objectives

Following are the objectives of this study:

To determine whether labeling affects buying behavior.

To find out current market behavior towards packaging.

To determine the effect of labeling on perceived risk which in return affect the purchase of a product.

To determine the impact of perceived quality on purchase of a product.

1.12 Justifications

Today’s generation is surrounded by labels. We see them in products, supermarkets and specialty shops and many of the choices we make in our daily life are dependent on labels and brand names. Labeling is vital so everything around us takes on its special character that is different from the rest.

1.12.1 Reason to study

To evaluate that labeling is important for packaging.

Consumer’s perception about labels before buying.

Products other than pharmaceuticals require proper labeling but consumers sometime do not see before buying & companies lose their customers.

Companies will focus more on labels to give proper information to their customers.

1.13 Limitations

Few limitations that will hinder this study are:

Pharmaceuticals products are not part of study.

Lack of time available.

Consumers restrain from sharing their information with outsiders.

1.14 Scope

Labeling impacting packaging style in today’s market that affects rapid or planned buying.

Research will be conducted only in Karachi.

It will be only applicable in Pakistani environment.

Sample size will be relatively small.

1.15 Assumptions

The study will be having following assumptions:

New products are not coming in markets.

Brand loyal are not attentive towards labeling.

Consumers are health & quality conscious.

Sometimes language on labeling is not understandable to consumers.

2.0. Literature Review

According to Rundh (2005) package attracts consumer’s attention to particular brand, enhances its image, and influences consumer’s perceptions about product. Thus package performs an important role in marketing communications and could be treated as one of the most important factors influencing consumer’s purchase decision. Packaging helps consumers to choose the product from wide range of similar products, stimulates customers buying behavior. According to Kotler (2003) there are six elements that according to him must be evaluated when employing packaging decisions: size, form, material, color, text and brand. Packaging could be treated as one of most priceless tool in today’s marketing communications as it gives more detailed study of its elements and an impact of those elements on consumers buying behavior.

Renaud (2007) researched on the influence of label and its validity and purchasing behavior. Labeling plays a relative importance in packaging as compared to other product attributes like pricing strategies for consumer buying behavior.

According to P.H.K.Prathiraja and A.Ariyawardana (2003) when consumer making purchase decisions their main focus is on labeling of those products especially if they are health conscious. Most of the consumers are willing to pay something additional if proper information about the product is mentioned on the packaging of the product. Nutritional labeling plays an important role in providing relevant nutrition information to consumers. If the products are not labeled consumers may not be fully aware of the nutrient content of the product. As a result the consumers makes their own belief about nutrient content based on advertising, public health messages and their knowledge of food sciences. According to Larceneux (2004), there are two routes that can that are likely to influence consumers purchase intention.

Perceived Quality: Consumers rely on brand and labeling as the indicator of certain products quality.

Perceived Uniqueness: Through the policy of labeling which relies primarily on uniqueness of products each producer seeks to distinguish products that helps to position the product in such a way that it remains in the mind of consumers.

According to Grunert (2001), high quality of a product remains an important source of competitive advantage for any product. Label always remains an important element as the identifier of a product that tells about the quality of the product. A label makes the consumer choice easier as it is an important evaluation criterion for the consumer as the competition is becoming very stiff and consumers are becoming more and more demanding. Boer (2003) suggests that impact of label on consumer purchase decision totally depends on the way a consumer perceives and thinks. If the labeling strategy is efficient then it can convince the consumer to differentiate between labeled products and other products. In many cases it can happen that the aspects which are covered by the label are not in the best interest of the consumer so labels then fail to fulfill their roles.

A label is considered as being the most powerful quality signal which can directly help the consumer to decide about buying a product. According to Giraud & Grunert (2001), perception of a label is a source of information provided to the consumers that may differ according to families and also it can differ according to the category of the product. According to Tavoularis et al (2007), women’s are more concerned about the product labeling and signals of quality as compared to men because women’s are the main buyers of different products as they go to malls and department stores as compared to men so it results in more straight and permanent contact with labeled products. As the consumer gets older their motivation to purchase labeled products gets even stronger. Labeling remain a solution for encouragement for the consumers and help them take a decision to buy a certain product. Consumers normally tend to seek for information that will be comfortable for them and will help to buy a product and make the right choice among a set of products belonging to the same category.

Education plays a vital role in determining the importance of a product and to see that what part is played by labeling strategies on a certain product. According to Europe (1996), the people who have studied middle education and higher education tends to be more open and focused on labeling as compared to those people who have studied till primary or even lower middle education.

According to Aprile (2004), it is not quite possible for the market to provide consumers with proper information about the attributes of a specific product and also to check that weather these attributes meets the needs of consumers or not. Caswell (1997), in today’s world consumers are information on the process and safety of foods and how these foods are produced. It is becoming more and more important in consumers mind the process of making of foods and all the characteristics that are attached to that food product. In making purchase decisions consumers considers attributes and information as a critical part of packaging. Labeling performs functions as a public tool that helps in direct support to purchasing decisions. Some advertising firms combine their advertising messages with the data included in the label that results to enhance the image of the product as well as increase the credibility of their message. Labels are conceived as claims put forward by sellers to inform buyers about certain characteristics of their products. Labeling also contributes to increasing the effectiveness of some other communication forms that are addressed to consumers such as re-education and public information programs. Labeling serves as an identity card of the product to make information immediately available to the consumers making purchase decisions. It is tool through which consumers are provided a whole set of data like expiry date, preservation procedures etc. .

Padberg (1992), direct support to consumers in their purchasing decisions plays a very prominent role in buying behavior. Labels must includes sales denomination, list of ingredients, minimum preservation time or expiry date, name and location of the manufacturer or packager, danger symbols and indication of danger involved in the use of the substance, location of the manufacturing plant and packaging plant, procedure to preserve and use the product when specific instructions have to be followed, instructions for use, place of origin as the lack of this information might mislead buyers as to the origin of the product. Labeling is aimed at achieving three main objectives: to guarantee proper and accurate information on product safety and healthiness, to protect consumers and manufacturers against any deceitful messages and to favor a fair competition amongst the firms operating on the market place. Label can also be a tool used by the firms to execute strategies to distinguish and improve their products. The level of information legally required will depend on the product. For instance food products have different requirements to that of clothing or cosmetics. A label must include ample information so that consumers know exactly what they are getting and can make an informed decision. Most importantly, the information must not be deceptive or misleading.

According to Rousu.C. & Corrigan.R. (2008), firms are heavily investing on new products and design of labels that will help to attract new customers and also will help to retain the existing customers. Firms spend millions of dollars to ensure that labels effectively inform consumers about the product. They would like to see that their consumers who are purchasing their product have a complete information about their product before making any purchase decisions. If proper measures are not taken and consumers are not well informed about the product then it may result in consumers purchasing a product that they don’t want to. There is a common perception that by simply placing additional and accurate information on label will lead to better consumer choices. But on the contrary there are evidences that by placing information on label might not be enough to inform consumers. Noussair, Robin and Ruffieux (2002), there are some labels that do not influence the consumer buying behavior like a product indicating that an ingredient is genetically engineered. There is a common perception that more information on a label will automatically provide with better information to the consumers.

According to Boer (2003), Labels are not just a message about a product or a service but it is a claim that states that it has some particular features and properties. Consumers normally have limited incentives to invest in obtaining information as the idea behind labeling seems to be very straight forward. Sometimes consumers are aware of the difference between sustainable and un-sustainable practices but they could not identify it in the market. Marketers make plans to enable consumers to identify these differences so that they become motivated to buy the labeled products instead of other products. According to Louw (1999), typically a shopper looks at the label of a product for about five to seven seconds and it does not matter that how many messages are there on the package.

According to Knox (2007) risk is an important factor of food choice. Consumer concern over food risk has increased while at the same time. Understanding of public perception of risk is crucial to the success of food safety. Dickson (1994) said that now a day firms spend more money on packaging than on advertising and packaging is often the most renowned marketing effort. Labels are one of the most important features of product packaging and these labels are always chosen to convey messages. According to Héroux (1988) marketers and marketing firms spend significant time and money on packaging products in a manner that will attract consumer’s concentration and promote its utilization. Color and shapes are the most appealing to consumers. Colors have meaning and are used as an essential tool to integrate marketing strategies and communication. These are often used for product and brand differentiation. Shapes also play a vital role in for these types of marketing strategies.

According to Peters (1994) packages are suggested to have great impact as a means of direct communication. A package is recognized as a marketing communication tool as packages convey meanings directly to consumers when the decision to purchase is being made. It is commonly accepted that packages convey meanings about the product and its features, benefits and how to use any products. Packages are found to attract attention. Pictures on packages are emphasized to attract attention especially when consumers are not familiar with the brands. Other than pictures, such signals such as colors, brand names and materials convey brand meaning. Most of the individuals respond to label shape variations and color compositions. De Mello and Pires Gonçalves (2008) found that there are strong preferences for selected combinations of colors and shapes in the composition design of labels. It is well accepted that packages have an essential role in influencing the consumer purchase choices and intention at the point of purchase. The impact of packages on consumer behavior and more closely their purchase intention affects at the point of purchase. Pictures on packages are emphasized to attract attention particularly when consumers are not very familiar with the brands. When consumers choose among competing products, they face quality and product performance uncertainty.

According to Bredahl, Grunert, and Fertin (1998) in order to design products that will be accepted by consumers it is necessary to translate consumer demands into product specifications that are actionable from the producer’s point of view. This is especially complex for food stuff because the way consumers perceive expected quality before a purchase is often different from the way quality is perceived after consumption. Perceived product quality is perhaps one of the most important constructs in marketing. Customer’s behavior can be defined as an activity focused on the purchasing, consuming and using of the products by making decisions before and after purchasing.

To determine the attributes by which to evaluate quality in goods and services is the classification that Nelson (1970, 1974) and Darby and Karni (1973) establish for the properties of goods differentiating three types of properties among consumer goods.

Search properties: It represents the attributes a consumer can determine before actually purchasing a product.

Experience properties: It represents the attributes that can only be discerned after purchase or during consumption.

Credence properties: It represents the characteristics that may be impossible to evaluate even after purchase and consumption.

According to Cronin and Taylor (1992) and Parasuraman, Zeithaml & Berry (1996) high perceived quality leads to repeat purchases and it is the foundation of any business. The importance of perceived quality derives from its beneficial impact on purchase intentions. It is expected that the higher the perceived quality of a product, the higher the consumer satisfaction. Our lifestyle has changed in this fast paced world as compared to few decades ago. Today more and more people are caught up in an endless cycle of buying and throwing away seeing consumption as a means of self-fulfillment. Consumption is the reason why anything is produced. Consumers have positive attitudes towards food products where one of the most common mentioned reasons in purchasing food products was that it is perceived healthier than conventional alternatives. Consumers do not always buy sustainable products as consequences of environmental concern or to benefit the community or due to personal beliefs but mainly to give priority to health and to be part of the social group and to distinguish from others as they seek out the quality of products through labeling that helps in purchasing any food product.

According to Titiana Klompenhouwer and Henk Van Den Belt (2003) the product information has influenced the perceived benefit on customers; therefore, their willingness to buy and use a product may change according to that. The name of the product, its price and its nutritional benefit information had a significant effect on the intention to buy products. Product labels are the chief responsible for conveying the food information to customers. The basic motive of legal regulation of labeling and advertising is to inform and protect the consumer therefore customers can make an informed choice. The food label is a prime marketing tool. It is a key source of information for the purchaser. Price cannot be excluded from the factors influencing the motivation to use foods. Price plays a crucial role in the decision of consumers to purchase foods. Demographic variables such as gender and age should also be taken into consideration in this aspect of the issue of purchasing behavior and decision-making. The consumers possess socioeconomic attributes, such as income, sex, age, household size, which frame their consumption habits. One of the most factors that makes people or customers pay attention to food products labels is General health interest, the second important factor is Organic concerns and the third is fitness interests. Expiry date is the most effective factor that can influence customers purchasing decision-making. More educated customers are more intended to purchase good quality products although it might be more expensive. People mostly check the food labels and almost understand the labels but most consumers don’t trust the manufacturer about the labels on the products, these consumers also need to know more about the ingredients of the foods and finally labels and their information or details about the products are the factors that influence on customers purchasing decision making. Cultural developments can be mentioned as one of the most important and effective factors influencing customers behavior, attitudes and perception toward food products.