How Important is a Products Packaging

MKT 120-N1, Fall 2011 David Bland, Instructor Holly Jolly

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HOW IMPORTANT IS A PRODUCTS PACKAGING?

The importance of a products packaging is often taken for granted by consumers even though it is involved in almost all product purchases. Many products could not be widely distributed, stored, or sold in stores without proper packaging. The main function of product packaging is for the protection and containment of the product but is also a powerful marketing tool, and can affect the success or failure of a product. Food packaging alone is a $110 billion per year industry and the third largest industry in the United States. There are manufacturing plants that produce nothing but packaging products which packaging distributors then sell to manufacturers of goods. In the food industry, there must be a coordinated effort between the packaging manufacturer, the packaging distributor, and the food processing plant to make sure that correct packaging is available in the correct quantity to package the food product at the end of processing to prevent spoilage. The packaging products themselves must have their own packaging to prevent their damage and to maintain the sterilization necessary in the food industry. Therefore, a products packaging plays an important role in product cost and profitability. In the beverage/soda industry, a manufacturer may choose plastic, glass, or aluminum cans to distribute their product. Many customers assume that the quality of a products packaging also indicates the quality of the product itself. The glass container may be the most expensive choice but, depending on the target market segment, may help differentiate it from its competition and have a positive influence on customer buying decisions thereby giving it a competitive advantage over its competition. In some small inexpensive products, such as gum, the packaging may cost more than the actual product. In the cosmetic industry, packaging

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accounts for 40% of the selling price. Therefore, a products packaging affects price and profit margins. The choice of packaging for shipping a product can also affect profit margins. If there is too much packaging it not only increases the cost of the item but adds weight to the item which increases shipping costs. But too little packaging can result in breakage or spoilage which would result in the loss of the product and its associated cost. Therefore, the proper amount and type of packaging can play a vital role in a products profit margins and can affect the final selling price to consumers. Packaging is informative. An integral part of product packaging is the label. In the food industry, packaging can provide nutritional information, product ingredients, serving sizes, expiration dates, usage directions, and storage requirements. In the consumer goods industry, it can provide information about the product features, color, dimensions of the product, weight of the product, usage directions, and assembly directions. In the medical industry, it can provide information about the product dosage recommendations and warnings. In addition, most of these industries have UPC symbols on the packaging which contain information about pricing and aid in inventory and sales tracking. This type of product information can help the retailer or distributor know which items are in demand and help the customer choose the right product for their intended use. Choosing the right product based on the packaging information can increase customer satisfaction and reduce cognitive dissonance. This can help establish a long-term relationship and brand loyalty which is important to the future success of a product. Packaging is also persuasive. A persuasive product packaging design focuses more on appearance, themes, or logos and helps the customer relate to the product. The promotional power of a product packaging design can affect how a customer perceives the quality of that

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product. A high quality product that is packaged poorly and has little shelf appeal will be perceived by the consumer to be a low quality product. The packaging design and structure can also add value to the product by making the product more attractive and easier to use. This is especially important for new or unfamiliar products. An attractive packaging design is not only important for attracting consumers, it is also important in attracting distributors. Distributors want the packaging to be eye catching and to conform to requirements for placing the product on their shelves and the shelves of the future retailer. If the distributor feels like the product is not attractive and will not appeal to their customers, they will not stock and distribute the product. Therefore, product packaging is an important and powerful promotional tool at every stage of the products distribution channel. Product packaging is protective. It contains and protects the product and enables distribution of many items that otherwise would not be available for wide distribution. Even produce in your local grocery store requires containment and protective packaging during shipment. Without this packaging the produce would be damaged or would spoil. In the food industry, packaging not only protects the product from physical damage, it protects food from light exposure, evaporation, spillage, spoilage, extreme heat or cold, contamination, and infestation. This protects the consumer and extends the shelf life of the product. In the medical industries, it also provides these same protections and insures that the product remains sterile. The product packaging provides air-tight barrier protection to insure the safety and freshness of our medications and to extend their shelf life. These packages not only provide dosage instructions and warnings, they also can provide specialized child safety caps, shrink wrapping, and foil seals to prevent product tampering and insure that the product does not become contaminated.

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The protection and containment of a product enables the wide distribution of many items. There is a wide range of packaging materials and products needed depending on the particular needs of that individual product. The size and weight along with whether it is a food or non-food item all have their own packaging requirements. Small crushable items such as small appliances, shoes, and cereal are typically placed in their own individual chipboard or corrugated boxes which are then placed in a sturdy corrugated carton. These cartons are placed on a pallet and secured with stretch wrap to prevent them from falling over or shifting during shipment and storage. Larger less fragile products may be secured on the pallet by using polyester or steel strapping. Other more fragile products may also require the addition of foam packing peanuts, bubble wrap, air pillows, or paper dunnage inside the individual boxes or cartons to further protect it from shock, vibration, breakage, deformation, and corrosion. Product packaging in the food industry has these same needs for protection and is also essential for the safety and distribution of many products that we enjoy. Food packaging has to be moisture or vapor proof or resistant, durable, leak-proof, protect from off flavors or odors, made of food grade material, tolerate of temperature changes, and easy to store and display on retail shelves. Produce requires strong crush resistant cartons which can tolerate refrigeration in order to be shipped to grocery stores across the country. Without it, we could not enjoy oranges and lemons from Florida or California. Sometimes specialty packaging has to be designed for an individual products special needs. Eggs could not be transported off the farm without special egg cartons to prevent their breakage. Our meats are wrapped in plastic and placed in cartons which are cold resistant and leak-proof during shipment. Once the meat arrives at the grocery store, it is placed on individual trays and rewrapped with food grade stretch film. Some products need barrier protection from oxygen, chemicals, dust, water vapor, and contamination which is

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usually done by using an appropriate type of bag, stretch film, or shrink wrap depending on the individual product needs. Coffee, rice, and sugar could not be contained and shipped without being sealed in bags. Liquids, such as laundry detergent, soda, and milk, require rigid plastic containers for containment. Many vegetables, sauces, and meats are packaged in cans in order to greatly extend their shelf life, prevent spoilage and contamination, and to facilitate grocery stores placement of the product on the shelf. All food product packaging must meet the requirements of the U.S. Food and Drug Administration. The use of recycled plastics is not approved for direct contact with food. Only FDA approved food grade plastic packaging can come in direct contact with food. Product packaging is also important in theft prevention. Most modern packaging contains an anti-thief device or tag which will set off an alarm if the item is taken from the store. In small items such as music CDs, DVDs, and computer software packaging, the packaging is intentionally made much larger than the actual product so that the item would be hard to conceal and to discourage thieves. In some high value products only an empty display package is placed on the shelf and the actual product is given to the customer after the product is purchased. Because of the pervasive use of packaging, there is a movement now to encourage more environmentally friendly or green packaging. Some packaging suppliers now offer recycling services for their plastic stretch wrap and shrink wrap since plastics are not biodegradable. There are now more eco-friendly packaging options such as the paper air pillows instead of foam packing peanuts or bubble wrap. There are also some paper based, leak-proof, heat-resistant food bags and containers that are being used in some restaurants and grocery store delis. This type of packaging not only is beneficial to the environment but can help attract customers who are concerned about environmental issues.

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Although different products have different packaging needs, the proper choice of packaging not only affects a companys profit margins but can give a new or existing product a distinct competitive edge over its competition. When you combine the persuasive advertising on printed packaging with the informational labeling on a products packaging, you are providing a powerful promotional tool for the marketing of new and existing products and product lines. This provides the customer with the necessary information that they need to be informed consumers. Consumers also depend on packaging to safe guard their food and medical supplies. Distributors depend on the product packaging to establish a products identity, provide space for promoting the product, to protect the product, and to protect their profit margins. As you can see, product packaging is prevalent throughout the consumer process, in every phase of the distribution channel, and plays an important role in protecting both the product and the consumer.

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Examples of Protective and Promotional Packaging

Promotional cereal box

Stretch Wrapped Pallet

Anti-Theft Prevention

Protective Carton

Protective Egg Carton

Containment/Protective Container

Protective Medical Blister Pack

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Bibliography
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