PACKAGING

Packaging has been variously defined in both technical and marketing literature. One of the most quoted definition is ‘Packaging is the art, science and technology of preparing goods for transport and sale'. This definition brings out two salient aspects of packaging. These are:

a)   It has to help in the physical transportation and sale of the products packaged.

b)   Packaging as a function consists of two distinct elements, (i) the positive aspects,viz., the science and technology related to package design, selection of packaging materials etc. and (ii) the behavioural aspects, viz., the art of product design which is associated with consumer motivation research, buying research, etc.  

The last aspect has been highlighted in another definition of packaging. ‘Properly designed, the package should enhance the value of its contained product, and impart that impression, either directly or subtly, to the customer'. The role of packaging in value enhancement is increasingly becoming important in consumer marketing today.

PACKAGING INDUSTRY

An understanding of the packaging industry is necessary to fully appreciate the packaging revolution that has occurred in the consumer and industrial goods sectors. The packaging industry consists primarily of two distinct segments, firms which manufacture the packaging materials, viz., tin, paper, plastics, etc. and firms engaged in the formation of packaging, i.e. , converting the packaging materials into unit/master packages. In addition there are other firms engaged in the printing of labels to be used in the unit/master packages, and the marketing research agencies which conduct specialised packaging research, generally for package development and adaptation.

Newer materials are constantly emerging in the packaging field and in many cases have eliminated or threatened the older materials, such as wood and steel, because of the relative cost advantage or better performance characteristics. The important packaging materials today are :

a)   Metals -Aluminium, Tinplate and steel

b)   Plastics -PVC, HDPE, etc.

c)   Wood -Wood and cellulose film

d)   Paper -Paper board, corrugated board, etc

e)   Glass -Clear, tinted etc.

f)    Laminates -Aluminium foils, plastic film etc.

g)   Polyester -PET.  

FUNCTIONS OF PACKAGING

Packaging should perform the following basic functions: it should (a) protect; (b) appeal; (c) perform; (d) offer convenience to the end-users; and (e) be cost-effective.

a) Protection

Of the five functions, this is the one which is the oldest and most basic. The primary function is to protect the products from the environmental and physical hazards to which the product can be exposed to, in transit from the manufacturer's plant to the retailer's shelves and while on display on the shelves.

The specific types of hazards against which protection has to be sought would obviously vary from product to product. It is however possible to identify the principal hazards which are almost universal. These are:

a) Breakage/damage due to rough mechanical or manual handling during transportation,

b) Extremes of climatic conditions which can lead to melting, freezing,

c) Contamination, either bacterial or non-bacterial, such as by dirt or chemical elements,

d) Absorption of moisture or odours of foreign elements,

e) Loss of liquid or vapour,

f) Pilferage during transit or storage  

Packaging Cost versus Damage to the Goods

While it may be technically feasible to identify the total risk profile of a product With regard to its physical and distributional parameters, it will not be necessary or economically desirable to develop and adopt a zero-risk package. After a certain stage, the reduction in the probability of loss due to the damages to the goods will not be commensurate with the increase in the packaging costs. Necessarily, firms are willing to accept a certain amount of risk arising out of possible damage to the goods rather than going for a fool-proof packing. The firm has to take a managerial decision as to than level of risks that it is willing to trade-off against the increase in packing costs: The relationship between the packaging costs and loss due to product damages is shown in Figure I.  

Figure-I  : Trade off between Damage and Packaging Cost

 

The vertical axis measures the loss sustained due to physical damage to. the goods because of insufficiency of packaging, expressed as a percentage of the total value of the consignment while the horizontal axis measures packaging cost as a percentage of production cost.

The curve AA which depicts the bilateral relationship clearly indicates that there an inverse relationship between the two variables. More significantly, there appears to be a point, C in the above figure, to the right of which further increases in packaging costs are not proportionately reflected in the loss reduction. It may be desirable to stop at that point. However, several other factors, apart from this marginal cost-loss reduction relationship, need be considered, while taking a final decision, e.g., the effect on consumer goodwill, availability of alternative packaging or materials which ensures higher protection at the same level of costs, etc.

b) Appeal

The package is increasingly being used as a marketing tool, especially in certain types of consumer products such as perfumes or several other gift articles. The importance also substantially due to the changed structure of retail business, especially the emergence of self-service stores.

In the case of consumer products, package serves as a silent salesman. This is true irrespective of whether the product is a luxury, semi-luxury or an ordinary everyday product. The following characteristics have been identified to help a package perform the self-selling tasks:

a) The package must attract attention.

b) The package must tell the product story.

c) The package must build confidence.

d) The package must look clean and hygienic.

e) The package must be convenient to handle, to carry out, to store and to use.

f) The package must reflect good value.

Packaging, however, is of greater importance in the case of certain specific types of articles. Industry-wise studies in several countries show that packaging costs in the cosmetics industry far outrun other industries. This excessively high incidence is not due to the packaging which is required for the protective function, but for making the product attractive, a status symbol and ego-satisfying. Other products such as chocolates in gift packs also are instances where packaging performs a basic marketing function by making the products more appealing.

Consumer research on packaging has basically concentrated on two aspects which are presumed to have an influence on consumer purchase decisions. The first one is colour and the second is the package or container design. Almost all researchers have come to the conclusion that each colour has its own distinct characteristics and, therefore, has to be used in a package so that there is no mismatch between what is expected of the package and the colour used in the packaging.

One additional problem in this area is that nationals in different countries display divergent colour preferences, due to their diverse socio-cultural-religious backgrounds. Similarly, research has been carried out on the desirable properties of a container. Slender, cute containers are often used for beauty-care products for the feminine sex, as these are expected to create an appropriate image of the product. Graphics and Logotypes are also important in designing and conveying the total product image.  

Packaging and Sales Promotion

Product package often plays an important role in implementing sales promotion campaigns. Promotion is defined as a short-term special measure to boost sales of a specific product. There are several accepted promotional packaging techniques. Some of these are:

a) Money-off Pack: A `flash' in distinctive colour is superimposed on the package, announcing the special price discount being offered. This is the most widely used form.

b) Coupon-pack: A coupon, either as a part of the package or placed separately in the package, of a certain value can be redeemed after the purchase of the product.

c) Pack-in-Premium: A premium, i.e., the gift is packed within the original product package, viz., a handkerchief in a cosmetic product package.

d) Premium-package : A specially made package having either a re-use or prestige value. Instant coffee packed in glass tumblers having closures is an example of the first type. The set of audio/software CDs, which is presented in a specially designed CD Cover is of second type.

e) Self-liquidator: The buyer has to send a number of packages or part thereof as evidence of buying the product to the company. In return, he may purchase additional quantity of the same product at reduced prices or be rewarded with a different product. Several companies in India, in the processed foods and beverages industry, occasionally use this technique.

f) Other Applications of Packaging as a Marketing Tool: There are several other innovative ways in which packaging can be used for achieving higher sales. In the area of processed foods, the shelf-life of the product is an important consideration. Any firm which can guarantee a higher shelf-life would be one-up on its competitors. A new Indian Company, Tasty Bite Eatables which is in the area of frozen and pre-cooked foods, identifies the 18th months shelf-life of its products as the major strength. The increased shelf-life is to a large extent due to better packaging.  

Introduction of a new package can also be used as a promotional technique. Till the very recent past, edible oils were packed in tin cans in India which looked messy and dirty. Most of the larger firms have now started using transparent one litre PET (polyethylene terephthalate) bottles which look gleaming and fresh. The companies are using this change of packaging quite effectively as an additional element in their advertising campaigns. About two decades back, 'Panama' cigarettes were introduced in a soft packet of twenty for the first time in India. The instant popularity of the brand was substantially due to this novelty.

Packaging can also be used ingenuously to avoid direct price comparison with the competing products. This is done by a deliberate choice of odd size, while the competing brands follow a standard size. A recent example in India is the case of Maggi Ketchup which was introduced in the market in 400 grams bottle, while the industry-wise standard size is 500 grams bottle.  

c) Performance

This is the third function of a package. It must be able to perform the task for which it is designed. This aspect becomes crucial in certain types of packaging. For example, an aerosol spray is not only a package but also an engineering device. If the package does not function, the product itself becomes totally useless.

d) Convenience

The package must be designed in a way which is convenient to use. The important point to be appreciated, however, is that it should be convenient not only to the end users but also to the distribution channel members, such as wholesalers and retailers. From their standpoint, the convenience will relate to handling and stocking of packages. The specific attributes they would seek in a package in this context are:

a) the package must be convenient to stock,

b) the package must be convenient to display,

c) the package does not waste shelf-space,

d) the package retains its looks during the shelf-life,

e) the master packages/cartons are easy to dispose of.  

Because of the increasing concern with solid-waste disposal, the last factor has assume importance in the developed countries, though India has not yet reached this stage. This, however, becomes a matter of importance while deciding on the transport packaging for export markets.

From the standpoint of the domestic or institutional end users, the convenience would refer to the ease of using the package, such as opening and closure of the package, then repetitive use value, disposability, etc.

e) Cost-effectiveness

The package finally must be cost-effective. Packaging cost as a percentage of product cost varies dramatically from one industry to another, from less than one per cent in engineering industry to more than 10 per cent in the cosmetics industry. It is important to appreciate that while analysing packaging costs, it is not enough to consider only the costs of package. This is only one, though the most important element of the total costs associated with packaging. Cost in this chain consist of:

i)     Package costs incurred in inward delivery to the factory when the product is purchased from outside.

ii)   Storage and handling costs of the empty packages.

iii)  Filling costs, including quality control and handling of filled packages.

iv)  Storage costs of the filled packages.

v)   Transport cost for distributing filled packages.

vi)  Insurance cost for the transit period.

vii)Losses due to breakage/spoilage of the product.  

LEGAL DIMENSIONS OF PACKAGING

While managing the packaging function, constant attention needs to be given to the various regulations that the government has laid down in this respect. Government regulations are many and encompass areas such as the use of a specific packaging material for certain products, consumer protection, transportation of hazardous cargo, etc. The most pervasive among these is the regulation relating to the information a manufacturer is obliged to provide in the package itself on the product. This is commonly known as labelling requirement and covers a host of commodities. Principal among these are food products, cosmetics, pharmaceuticals, etc. Label is defined as a display of written, printed or graphic matter on the container or the package of the container.

A label need not be only a fulfilment of legal requirement. In fact, properly conceived, a good label can be an important sales instrument.

Since a label is the nearest source of information on a product, a buyer who otherwise may be ignorant of the product or loyal to a different brand, can be persuaded to read the label, and may in fact try the product, even if he had no such premeditation. This is especially true of purchase made in super markets or departmental stores.

A good label is one which helps a potential buyer to make his decision by providing relevant and correct information. Apart from the information which must be statutorily given, the label should therefore provide:

i)     Picture of the product, accurate as to size, colour and appearance.

ii)   Description of raw products used along with methods of processing.

iii)  Directions for use, including cautions against misuse.

iv)  Possible adverse effects, if any.

v)   Brand name  

Statutory requirements relate generally to:

i)     Net weight, when packed.

ii)   Date of manufacture.

iii)  Date of expiry.

iv)  Maximum retail price including or excluding local taxes.

v)   Directions for use, including dosage requirements.

vi) Directions for storage.