PACKAGING AND LABELING

DECISIONS
PACKAGING:
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 can also be described as a coordinated system of preparing goods

for transport, warehousing, logistics, sale, and end use. Packaging contains,
protects, preserves, transports, informs, and sells.

Well-designed packages can create convenience and promotional value.

Packaging can be considered as a styling weapon, especially in food
products, cosmetics and small consumer appliances. The package is the
buyer’s first encounter with the product and is capable of turning the buyer
on or off.
Purpose of Packaging:

Packaging has several objectives:

Brand Identification – Packages contributes to instant recognition of the

company’s brand.

Physical protection - The objects enclosed in the package may require

protection from, among other things, shock, vibration, compression,
temperature, etc.

Barrier protection - A barrier from oxygen, water vapor, dust, etc., is often
required. Permeation is a critical factor in design. Some packages contain
desiccants or Oxygen absorbers to help extend shelf life. Modified
atmospheres or controlled atmospheres are also maintained in some food
packages. Keeping the contents clean, fresh, and safe for the intended shelf
life is a primary function.

Containment or agglomeration - Small objects are typically grouped

together in one package for reasons of efficiency. For example, a single box
of 1000 pencils requires less physical handling than 1000 single pencils.
Liquids, powders, and granules need containment.

Marketing - The packaging can be used by marketers to encourage potential

buyers to purchase the product. Package design has been an important and
constantly evolving phenomenon for several decades. Marketing
communications and graphic design are applied to the surface of the package
and (in many cases) the point of sale display.

Security - Packaging can play an important role in reducing the security

risks of shipment. Packages can be made with improved tamper resistance to
deter tampering and also can have tamper-evident features to help indicate
tampering. Packages can be engineered to help reduce the risks of package
pilferage: Some package constructions are more resistant to pilferage and
some have pilfer indicating seals. Packages may include authentication seals
to help indicate that the package and contents are not counterfeit.

Convenience - Packages can have features which add convenience in

distribution, handling, stacking, display, sale, opening, reclosing, use, and
reuse.

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Portion control - Single serving or single dosage packaging has a precise
amount of contents to control usage. Bulk commodities (such as salt) can be
divided into packages that are a more suitable size for individual households.
It is also aids the control of inventory: selling sealed one-liter-bottles of
milk, rather than having people bring their own bottles to fill themselves.

Packaging as a Marketing Tool:

Various factors have contributed to the growing use of packaging as a

marketing tool:

Self-Service – Due to an increasing number of super markets where a

shopper passes by many items per minute, it becomes necessary for the
products to attract attention and make favorable overall impression.

Consumer Affluence – Due to rising consumer affluence, 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.

Innovation Opportunity – Innovative packaging can bring large benefits to

customers and as a result large profits to producers.

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 e.g. fiberboard, wooden crate etc.

Consumer Packing: This packaging holds the required volume of the

product for ultimate consumption and is more relevant in marketing e.g.
beverages, tobacco etc.

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Packaging Decisions
Fulfill the Objectives:

From the perspective of both the firm and consumers, packaging must
achieve a number of objectives:
• Identify the brand,
• Convey descriptive and persuasive information,
• Facilitate product transportation and protection,
• Assist at-home storage, and
• Aid product consumption
It must be confirmed to develop an effective package that these objectives
are fulfilled.

Package’s Size and Shapes:

It has to be decided that what the exact size of package is and in what shape
should be the package which is both attractive for the customer and
convenient to use.

Package’s Color, text and graphics:

To attract the customers, the package should have an appealing color, text
and graphics on it. Color must be carefully chosen: Blue is cool and serene,
red is active and lively, yellow is medicinal and weak, pastel colors are
famine and dark colors are masculine. Similarly, text and graphics also have
a great psychological impact on customers and should be chosen carefully.

Package’s Cushion Material:

Cushioning is that part of packaging, which protects the article from damage
due to shock and vibration. The main functions of cushioning materials can
be detailed as follows:

• Shock protection against vibration

• Protection against abrasion

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 • Protection of grease proof and water proof barriers at point of contact
with solid blocks
• Protection of moisture vapours barriers at points of contact with sharp
edges of the article itself.
• Protection of small projections
• Filling of void space in the container
• Other secondary purposes

It has to be chosen that what material has to be used for cushioning which
fulfills these purposes and also is affordable to the company.

Packaging Cost:
The most important aspect when we look into packaging is the packaging
cost. Packaging cost includes the following:

• Material cost: It means the cost of the pack and quality control cost.
• Storage and handling cost of empty packages: This include the
handling cost of bulky packages, heavy materials of construction,
drums etc.
• Packaging operation costs: This includes the cost involved in
operations like, cleaning the package product filling – closing,
labeling – unitizing, stenciling, handling cylindrical slums etc.
• Storage of filled packages: This includes the cost incurred to shift the
goods from one form of packaging to another.
• Transportation cost of filled packages: This involves the
transportation cost by sea, air etc. (freight by volume)
• Loss and Damage cost: It is related to the loss and damage during
operation, transportation delivery etc.
• Insurance cost: It varies depending on the vulnerability of package
• Effect of packages on sales: The package that influence on sales.
• Obsolescence Cost: This cost involves when changes in the packaging
materials, packages and labels happen.
• Package developmental cost: This include the evaluation cost, pilot
test cost, field testing cost, consumer research cost, feed back cost,
• final trial cost etc.

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Harmony between various elements of Packaging:

The various packaging elements must be harmonized. The packaging

elements also are harmonized with decisions on pricing, advertising, and
other parts of marketing program.

Testing Packaging:

After packaging is designed, it must be tested. Engineering tests are

conducted to ensure that the package stands up under normal conditions;
visual tests to ensure that the script is legible and the colors harmonious;
dealer tests to ensure that dealers find the packages attractive and easy to
handle; consumer tests to ensure favorable consumer response.

Green Packaging:

Due to increased consumer awareness, companies also have to pay attention

to growing environmental and safety concerns about packaging. Packaging
creates a major problem for solid waste disposal, requiring huge amounts of
labor, energy and expense. The traditional “three R’s” of reduce, reuse, and
recycle are part of a waste hierarchy which may be considered in product
and package development.

Innovation Packaging:

Packaging innovation over the years has resulted in packages becoming

resealable, tamper-proof and more convenient to use (easy-to-hold, easy-to-
open, or squeezable). Innovative packaging helps a great deal in increasing
the sales of a product. So company should try its best to develop an
innovative package.

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LABELING:
Labeling is any written, electronic, or graphic communications on the
packaging or on a separate but associated label. Sellers must label products.
The label may be a simple tag attached to the product or an elaborately
designed graphic that is part of the package. The label might carry only the
brand name or a great deal of information.

Purposes of Labeling:

Labels perform several functions:

Brand Identification – The label identifies the product or brand.

Product Grading – The label might also grade the product; canned fruits
are grade labeled A, B and C.

Product Description – The label describes the product: who 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.

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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 design, while
maintaining a control space around the logo of 1/2 inch.

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.

Features and Benefits

Listing a product’s 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.

Weights and Measures

Weights on measure of a product are important for stocking, inventory and
selection. There are international standards that apply for formatting this
information. Identifying the weights and measures of products helps
customers select the appropriate amount of product to suit their needs. While
there are no consistent worldwide standards, in the United States and many
other countries, the information is highly regulated by truth-in-labeling laws.

Instructions for Use

Listing a product’s 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.

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

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

Statement of Contents

The contents of a product must be accurately described on its packaging

label according to local regulations.

Nutritional Labeling (incase 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 content as a percentage of the recommended daily allowance.

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).

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

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Effective Packaging and Labeling:
About packaging and labeling it is asserted that as media gets more difficult,
more fragmented and more expensive, the role that packaging can play in
adding value to a brand has increased significantly. The trick, of course, is to
add more packaging value than cost, and hence be able to charge a price
premium and make an increased profit. Effective packaging and labeling is
one of the most difficult parts of the mix to progress in companies; it
concerns almost ever discipline. The key to developing great packaging and
labeling lies in how the resources of the organization are utilized. This is
because, unlike, say, advertising, packaging development can impinge on
almost every department, especially if it involves physical structure. There
are a number of key process requirements:

• Understand the role and expertise of all the various disciplines

involved (e.g. production, packaging development, distribution,
supply chain, customer marketing, consumer marketing, PR).

• Ensure senior manager sponsorship for the changes or developments

that are proposed.

• Involve everyone at an early stage and establish a ‘teamwork’ modus

operandi.

• Be clear about objectives, responsibilities, time scales, costs and

record them regularly in writing.

• Establish clear leadership of the team so that the pace and direction of
activities can be judged.

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