Week 7.4 Packaging and Labelling

Packaging and labelling are an integral part of products. A consumer’s first exposure to the product starts with the package and label. Businesses spend time and effort to create customer value through packaging and labelling. When carefully designed, packaging and labelling can provide a competitive advantage.

A label is a part of the package that identifies the product or brand. It discloses who made the product, how it is to be used, and package contents and ingredients. 

Packaging and labelling provides the following benefits:

1. Communication benefits: The label on packaging conveys important information to the customers such as the expiration date, instructions on how to use the product, and the list of ingredients.  
2. Functional benefits: Packaging often plays a functional role, such as storage, convenience, or protection of product quality/freshness.
3. Perceptual benefits: Consumers face dozens of products on the shelves. Package and label shape, colour, and graphics distinguish one brand from another. It also conveys a brand's positioning, and helps build brand equity.

It is not a simple task to come up with creative but low-cost strategies in packaging and labelling. There are four main challenges package and label designers face:

1. Connecting with customers
2. Environmental concerns
3. Health safety and security Issues
4. Cost reduction

Connecting with Customers

Packages and labels must be continually updated to connect with customers.

Retrieved from https://www.kleenex
.com/en-ca/products

Example: Kleenex tissues decided to update their standard rectangular box into an oval shape with colourful graphics. This update was appreciated by the consumers and their sales soared with this aesthetic change in packaging.

Environmental Concerns

Recycling packaging material is a major need. There is a widespread worldwide concern about the growth of solid waste and the shortage of landfill sites. The amount, composition, and disposal of packaging materials are a big concern for many businesses. There are many companies involved in environmentally friendly packaging and production.  

Walmart prioritises packaging in their latest
sustainability pledge. (2016, November 7). Retrieved from
https://www.biobased worldnews.com/walmart-prioritises
-packaging-in-their-latest-sustainability-pledge

Example: Walmart is emphasizing the use of less packaging material. Walmart is working with its 600,000 global suppliers to reduce overall packaging and shipping materials. 

Health, Safety, and Security Issues 

For some products, there is need for a child-resistant safety latch to prevent misuse or ingestion of the product, which could cause harm to the child. 

Cost Reduction

Profit equals revenue minus cost. Cost is a concern for any profit driven business. Businesses try to find innovative ways to cut packaging costs while delivering value to their customers.

hedgehog94/iStock/Getty Images

Example: Coca Cola was one of the first beverage companies to introduce recycled PET (polyethylene terephthalate) into a beverage package in 1991. This allowed for a reduction in their production cost without a comprimise on the packaging quality. 

Product Warranty

A warranty is a statement indicating the liability of the manufacturer for product deficiencies. There are limited and full warranties applied by the manufacturers. 

A limited-coverage warranty specifically states the bounds of coverage and, more importantly, areas of non-coverage. 

A full warranty covers everything with no limits of non-coverage. Studies show that warranties have an important effect on consumer's product evaluation. Brands that have limited warranties tend to receive less positive evaluations compared with full-warranty items.