Packaging Decisions Module- vii

By Srikanth Venkataswamy

Module VII: Packaging Decisions• Importance of Packaging in Marketing• Packaging as an Art• Packaging Concept• Packaging and Product Differentiation• Science and technology of Packaging• Packing Notes and Packing Lists• Trends in Packaging Machinery• Functions of Packaging• Packaging Strategies• Legal Aspects of Packaging• Cost Effectiveness of Packaging• Social Aspects of Packaging

Importance of Packaging in Marketing

Packaging : Packaging is an important

component of the total product personality .

The Package performance three essential roles:

1. Giving protection to the product2. Giving information about the product3. Adding to its aesthetics and sales

appeal

Importance of Packaging in Marketing

Traditionally, Packaging was intended to protect the product-

• To prevent deterioration en-route.• To facilitate handling at various points of

distribution.• In later Years, Packaging also became a major

tool in the promotion of the product.• The material of package, the colour, the shape

and the size of the package, its finish, the labeling on it, the possibility of reuse etc

can build in the total sale appeal of the product.

• Marketers are providing Value addition to the products and greater benefits to the customer through the packaging route

What is Packaging?• Packaging is the enclosing of a physical

object, typically a product that will be offered for sale.

• Packaging can be defined as the wrapping material around a consumer item that serves to contain, identify, describe, protect, display, promote, and otherwise make the product marketable ,keep it safe & clean. 

• Packaging is the outer wrapping of a product.

What is Packaging?

Kotler defines packaging as :

"all the activities of designing and producing the container for a product."

“Package is the process of making available the product in its intend form Of use from the producer to the consumer across different Levels of transfer”. Prof Srikanth Venkataswamy

Packaging: Functional Requirements (Functions of Packaging)

1. Protection and preservation 2. Containment

3. Communication

Packaging: Functional Requirements (Functions of Packaging)1. Protection and preservation • A basic function of package is to protect and

preserve the contents during transit from the manufacturer to the ultimate consumer.

• It is the protection during transport and distribution; • From climatic effects (heat and cold, moisture,

vapour, drying atmospheres); from hazardous substances and contaminants; and from infestation.

• Protection is required against transportation hazards spillage, dirt, ingress and egress of moisture, insect infection, contamination by foreign material, tampering pilferage etc.

• A package should preserve the contents in 'Factory Fresh' condition during the period of storage and transportation, ensuring protection from bacteriological attacks, chemical reaction etc.

Packaging: Functional Requirements (Functions of Packaging)

2. Containment • Most products must be

contained before they can be moved from one place to another.

• To function successfully, the package must contain the product. This containment function of packaging makes a huge contribution to protecting the environment.

• A better packaging help to maintain the quality of the product and reach-ability of the product in the consumer's hand without spillages It gives better image to the organization.

Packaing: Functional Requirements (Functions of Packaging)

3. Communication • A major function of packaging is the communication

of the product. • A package must communicate what it sells. When

international trade is involved and different languages are spoken, the use of unambiguous, readily understood symbols on the distribution package is essential.

• It is the interest further that to get appropriate communication to the consumer about the product, how to use it and other utility information's.

• Packaging protects the interests of consumers. Information includes: quantity; price; inventory levels; lot number; distribution routes; size; elapsed time since packaging; colour; and merchandising and premium data.

Packaging and Product Differentiation

What is Product DifferentiationWhat is Product Differentiation ?

• The product differentiation definition states that it is the process by which a product is distinguished from others, so that it appeals more to the target audience.

• Other than distinguishing the product from its competitors, this process should ensure the product is distinct from all other products the company offers.

• Product differentiation gives the product or service an edge over rival products.

• It highlights unique aspects of the products as and also generates value for the product in the eyes of the buyer, which should be any manufacturer's ultimate goal.

Ex: product mix, Product Features Product awareness & reputation, distribution channels, Packaging ,Advertising, services,timing etc

• When the buyer perceives, a difference is when he will remember the product and buy it, thereby resulting in higher sales for the company.

Product differentiation can sometimes be done without modifying or altering the product or its features.

This can be done by adopting an attractive or unique packaging, or by opting for a unique advertising campaign which registers itself in minds of the customer.

Basic Differentiation A) In Protecting the Product:• Reduce costs due to breakage. • Protect the product in transit: for example breakable or

perishable items such as perfume, light bulbs or food. • Protect the product on the shelf: from theft, damage or

tampering (i.e., pharmaceuticals or CDs). B) In Promoting the Product:• Complement other promotional activities. • Communicate information: core benefits, “why to buy”

testimonials, Internet addresses and toll-free telephone numbers, for products like tools or software.

• Display the product: attach to display hardware or stand upright as with gloves or cell phones.

Value DifferentiationC) Provide Additional Value and Differentiation• To provide increased purchase justification. • Dispense the product: ease of use or the size of

recommended portions, as with spray paint, hair care products, etc.

• Preserve the product: seal and reseal perishables. Examples are food products and cleaning supplies.

• Offer consumer safety: warn of hazards due to improper use of dangerous substances (such as the information on cigarette packaging) or design considerations (such as Beverage can opening mechanism).

• Serve other uses: containers that can be used for other after-purchase purposes. Film canisters might carry a couple days’ vitamins or aspirin in a backpack. A current foldable bicycle ships and travels in a suitcase, which then converts into a trailer to be pulled behind the bike.

Generic Differentiation• Retail products purchased on an impulsive basis

depend heavily on packaging to communicate information and encourage a buy decision.

Music CDs, perfume, and software are examples of this.

• An increasing number of products are purchased without the assistance from a store employee, magnifying the opportunity and impact of the package.

• Well-designed packages offer a promotional tool and convenience value to the user. This can result in another form of product differentiation.

• Packaging can offer after-purchase value to store the product, or be used for other uses.

Differentiation on shelf

• A custom carton shape that works together with mouth-watering photography to create product differentiation on shelf.

• This is significant because private-label packaging generally features stock components and typically relies on strong photography and vivid color reproduction to ramp up the graphic intensity while also minimizing costs.

Design Differentiation

Competitors Design Design Differentiation

Process Differentiation

Egg Packaging

Usage Differentiation

Usage Differentiation

Packaging Machines

• Cartoning• Case Erect / Pack / Seal• Coding / Marking• Form / Fill / Seal• Filling, liquid & viscous• Labeling Machines• Palletizing/Depalletizing• Adhesive application• Aseptic packaging • Bagging fill/seal• Blister / sealing / skin equipmet

• Blow molding• Capping• Checkweigh / counters• Container handling/orienting• Converting equipment• Conveying / accumulating / lane dividers• Feeding / inserting / collating• Filling, dry• Filling, tube• Fill / seal, cup / tub / tray• Flow wrappers• Induction sealing• Inspection (machine vision, X-ray)

• Multipacking• Overwrapping• Pouching• Robotics• Shrink wrapping• Shrink banders / sleevers• Strapping / banding• Stretch wrapping• Testing / measurement• Thermoforming equipment• Unscrambling / orienting• Vacuum packaging

Types Packaging Materials• Closures• Containers• Flexible Packaging• Labels• Shrink Film / Labels• Adhesives• Bags, pre-made• Blisters / clamshells / thermoforming• Bulk (IBC's, drums, pails, etc.)• Carded packaging

• Cases / trays / corrugated• Cups / tubs / trays / foodservice• Desiccants• Lidding• Paperboard / Paper• Pouches• Protective packaging• Reclosable packaging• Resins / pigments / additives• Stretch film• Tape• Tubes

Legal Aspect of PackagingThe Indian Regulatory System falls under the category of compulsory

legislations formulated by the various ministries and voluntary standards framed by various organizations to serve the country. The National Regulatory System is shown in Table 1.

The Packaging Laws and Regulations for food products are mainly covered under:

1. The Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (SWMA).

2. The Prevention of Food Adulteration Act, 1954 and the Prevention of Food Adulteration

3. Rules, 1955 and its first amendment, 2003 (PFA).4. The Fruit Products Order, 1955 (FPO)5. The Meat Food Products Order, 1973 (MFPO)6. The Edible Oil Packaging Order, 19987. The Agmark Rules

Important Legal Aspects of Packaging

The Act also specifies the base units for:• Length – Metre• Mass – Kilogram• Time – Second• Electric Current – Ampere• Thermodynamic Temperature – Kelvin• Luminous Intensity – Candela• Base Unit of Numeration – International form of

Indian numeralsDeclaration

Declaration on Packaged Commodities for Interstate Trade or Commerce

In The Standards of Weights & Measures Act (SWMA) Chapter IV (section 39),

The Act stipulates that for interstate trade or commerce of commodities in packaged form, intended to be sold or distributed, every commodity in packaged form has to bear upon it, on a label securely attached to it, a definite, plain and conspicuous declaration of:

• Identity of the commodity in the package• Net quantity, in terms of the standard unit of weight or

measure, of the commodity in the package• Where the commodity is packaged or sold by number, the

accurate number of commodity contained in the package• The unit sale price of the commodity in the package• The sale price of the package.

Additional requirements

1. Every package should bear the name of the manufacturer and also of the packer ordistributor.

2. The statement as to the net weight, measurement or number of the contents should nothave any expressions, which tend to qualify such weight, measurement or number.(Exceptions to this are commodities which may undergo changes in weight or measuredue to climatic variations; examples – bread, soap, etc. where the qualifying statement“when packed” may be added to the net weight or measure).

Where the retail price of a commodity is stated in any advertisement, the net quantity ornumber of the commodity must be conspicuously declared in the advertisement alongwith the price.

• A package containing a commodity, which is filled less than the prescribed capacity ofsuch package cannot be sold or distributed except where it is proved that the package isso filled with a view to

(a) giving protection to the contents of the package or (b) meeting the requirements of machines used for

enclosing the contents of such packages.

The Central Government may, by rules, specify reasonable variations in the net contentsof the commodity in a package as may be caused by the method of packing or theordinary exposure which may be undergone by the commodity after it has beenintroduced in the market place.

This very comprehensive and far-reaching Act has put an end to the state of near anarchyin the trading of packaged goods. The clearly specified requirements in the Act have

also provided a challenge to packaging development experts and label copy specialistswho have to include statutory and promotional copy in the limited space available onlabels and on packages themselves. However irksome they may appear, the provisionsof this Act are welcome because they offer to the consumer a measure of protectionwhich is not so apparent in many other legal requirements.

Label DeclarationsLabel DeclarationsIn the SWMA Rules, the declaration to be made on every retail

package has been detailed.The declarations are to be made with respect to the following::• The name and address of the manufacturer or where the

manufacturer is not the packer, the name and address of the manufacturer and packer.

• The common or generic names of the commodity contained in the package.

• The net quantity in terms of the standard unit of weight or measure, of the commodity contained in the package or where the commodity is packed or sold by number, the number of commodity contained in the package.

• The month and year in which the commodity is manufactured or pre-packed. (Provided that for packages containing food articles, the provisions of the Prevention of Food Adulteration Act (PFA), 1954 (37 of 1954) and the rules made thereunder shall apply).

• The retail price of the package.• The retail sale price of the package.

1. Where there is undue proliferation of weight, measure or number in which any commodity is being sold and such undue proliferation impairs, in the opinion of the Government, the reasonable ability of the consumers to make a comparative assessment of the prices after considering the net quantity or number of such commodity, the Government may prescribe standard quantities or numbers for any commodity.

• Universal boxes and packaging material can be used for the product basically for multi-locational companies

• Alternate materials can be used • Execessive packaging to be avoided • Use pre printed boxes/ wrappers It can save cost on

printing • Automation on packing machines can also help

reducing packaging cost• Packaging cost  have substantial  contribution on

product costing above mentioned  steps could reduce cost of packaging

Social Aspect Of Packaging

Green PackagingWhat is Green Packaging?• Green packaging is not just about reducing the

amount of packaging but takes package design, processing, disposal conditions and the entire product lifecycle into consideration. Some of characteristics of sustainable packaging include:

• Minimizing the amount of packaging used (weight and volume)

• Minimizing the energy used for production and transportation of goods

• Using packaging that can be reused again, such as bottles and refillable ink cartridges

• Using recycled and recyclable materials • Using biodegradable materials

Costs minimization

• Providing protection from mechanical damage • Increasing shelf life of product • Easy handling of items during transportation • Advertisement and messages from Manufactures• Legal declarations on packs for consumers

Read more: http://www.articlesbase.com/business-ideas-articles/packaging-cost-reduction-ideas-1816930.html#ixzz14xUPh17G

Following steps can results in savings

• Alter dimensions of the primary /secondary packaging as per the product

• Change the product dimensions as per the secondary packaging which would result in better handling and optimum use during stacking and loading an container

• Thickness of the material used in packaging can be reduced with trials on breakages can be done and items are approved thus the tested material are safe during transit .

• Preformed boxes /cartons can be used rather than employing labor to prepare in house

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