Packaging

Nearly all tangible products (i.e., goods) are sold to customers within a container or package that, as we will discuss, serves many purposes including protecting the product during shipment. In a few cases, such as with certain produce items, the final customer may purchase the product without a package but the produce marketer still faces packaging decisions when it comes to shipping to the store. Thus, for many products there are two packaging decisions:

1. Final Customer Package
2. Distribution Channel Package

   Packaging: Final Customer Package

   This relates to the package the final customer receives in exchange for their payment. When the final customer makes a purchase he or she is initially exposed to the Primary Package – the outermost container that is seen and touched by the final customer. This primary package can be further divided into the following:
   

   • First-Level Package - This is packaging that holds the actual product (e.g., Tylenol Bottle). In some cases this packaging is minimal since it only serves to protect the product. For instance, certain frozen food products are sold to consumers in a cardboard box with the product itself contained in a plastic bag found inside the box. This plastic bag represents the first-level package. In other cases frozen food products are sold in the plastic bag that contains the product. In these cases the plastic bag is both first-level package and the primary package for convey product information.
   • Second-Level Package – In some cases the first-level package is surrounded by one or more outer packages (e.g., box holding the Tylenol Bottle). This second-level package may act as the primary package for the product.
   • Package Inserts - Marketers use a variety of other methods to communicate with customers after they open the product package. These methods are often inserted within, or sometimes on, the product’s package. Insertions include information such as instruction manuals and warranty cards, promotional incentives such as coupons, and items that add value such as recipes and software.

   Labeling

   Most packages, whether final customer packaging or distribution packaging, are imprinted with information intended to assist the customer. For consumer products, labeling decisions are extremely important for the following reasons.

   • 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 a new customer sees and thus offers their first impression of the product.
   • The label provides customers with product information to aid their purchase decision or help improve the customer’s experience when using the product (e.g., recipes).
   • Labels generally include a universal product codes (UPC) and, in some cases, radio frequency identification (RFID) tags, that make it easy for resellers, such as retailers, to checkout customers and manage inventory.
   • For companies serving international markets or diverse cultures within a single country, bilingual or multilingual labels may be needed.
   • In some countries many products, including food and pharmaceuticals, are required by law to contain certain labels such as listing ingredients, providing nutritional information or including usage warning information.

Packaging

Packaging includes the activities of designing and producing the container for a product. The package may include up to three levels of materials. E.g. Old spice aftershave

Bottle - primary package

Cardboard box - secondary package

Corrugated box - shipping package

Packaging is any container or wrapping in which the product is offered for sale and can consist of a variety of materials such as glass, paper, metal or plastic depending on what is to be contained. Packaging is an important part of the product that not only serves a functional purpose, but also acts as a means of communicating product information and brand character. The packaging is often the consumer’s first point of contact with the actual product and so it is essential to make it attractive and appropriate for both the products and the customers need.
Due to the growth of mass merchants and self-service, manufacturers have come to realize the value of packaging as a marketing tool. Today it is a vital part of a firm’s product-development strategy; a package may even be an integral part of the product itself. Packaging has become a potent marketing tool. Well-designed packages can create convenience and promotional value.

Developing an effective package for a new product requires several decisions. The first task is to establish the packaging concept: defining what the package should basically be or do for the particular product. Decisions must include the following elements: size, shape, materials, color, text and brand mix.

The packaging elements must also be harmonized with decisions on pricing and other marketing elements. Once the packaging is designed, it must be tested.
Factors that have contributed to packaging growing use as a marketing tool:- • Self service: An increasing number of products are sold on a self-service basis. The package attract attention, describe the products features, create consumer confidence and make a favorable overall impression • Consumer affluence: Rising consumer affluence means consumers are willing to pay a little more for the convenience, appearance dependability and prestige of better packages. • Company and brand image: packages contribute to instant recognition of the company or brand. It differentiates a product from competitors by its design, color, shapes and methods. • Innovation opportunity: Innovative packaging can bring large benefits to consumers and profits to producers. Packaging can be a major element of new-product planning. • Promotional tool: It serves as a promotional tool and is the final form of promotion the consumer sees prior to making purchase decision. • Reminder: A package also serves as a reminder after a purchase is made.

Although packaging is expensive, developing effective packaging may cost several hundred thousand dollars and take several months to complete. Companies must pay attention to growing environmental and safety concerns about packaging. Shortages of paper, aluminum, and other materials suggest that marketers should try to reduce packaging.