[Commerce Class Notes] on Packaging Pdf for Exam

When you go to buy something, you might find yourself illogically getting drawn to some products which you have not even tried earlier. If you analyse that behaviour of yours, you would understand that the product is packaged in a style that appeals to your senses.

One of the main things about any product is its eye-catching packaging which makes it stand out from other products. In this article, we will define packaging and look at various factors around what good or bad packaging can do to the image of the brand, its sales and profits.

Introduction to Packaging

Today’s market is inundated with products of many brands, and there is cut-throat competition. It has become challenging for marketers to gain consumers’ attention and establish the value of their product in customers’ eyes. That is why product packaging as a marketing tool is considered as an ultimate opportunity by the marketer to help them convey their brand’s message visually. A vast supermarket may hold as many as 20,000 products and all the marketers have got is a typical 30-minute shopping session of a customer to grab their attention and influence them to take their product. Surveys have displayed that 60 to 70 percent of buying decisions happen directly in the stores, and are not preplanned. Many factors govern their final choice of product. Some consumers go for the brands they trust, some do extensive research and decide on a brand and a large chunk of the buyers are impulsive buyers.

The packaging design is one of the prime reasons for on-spot buying decisions as the packing develops consumer’s attitudes towards the brand. It also depends upon the personality of the customer, lifestyle culture and various other factors like:

• The Spontaneous Urge to Buy – Just like a child getting fascinated by colourful balls, a customer can respond to an advertisement or a display spontaneously and decide to buy that product.

• Compulsion- Certain packaging elicits urgent buying desires in customers.

• Animation- A product exuded some mysterious appeal.

• Hedonic Elements- The decision to buy came from some positive or negative emotion to fulfil some satisfaction or guilt.

Product Packaging Definition

The definition of packing is given as a group of activities that go into the planning of a product. These activities are centred around the design of the product along with an attractive and suitable wrapper or container for the commodity. Attractive packaging with an appropriate container in itself can act as a silent salesperson who is forceful with its vibrant exterior and can work on the psyche of impulse buyers. Many times the package design itself could become a registered brand. There are two basic functions that the packaging is aimed at:

• Protect the product.

• Promote the product.

Philip Kotler, an American marketing author, defines packing as having the three traditional purposes of “protection”, “convenience” and “economy”. However, today’s era calls for adding all the modern functions of packaging.

Functions of Packaging

The most common functions of packaging are:

• Physical Protection- The product requires protection from many things like vibration, mechanical shock, compressions, temperature, etc. Packaging serves the aim of protecting the product from all these factors.

• Transmit Information- Packages have labels that inform the product user on how to use, recycle, transport or dispose of the product and the package. With certain products like pharmaceuticals, food, chemical products, etc., this information on the packaging is required by the government also. Some labels and packages can be used to track and trace as well.

• Marketing- The physical design and graphical design of the packaging of a product has been a vital element used by marketers for decades to impress buyers in buying their products.

• Convenience- Certain packaging features can make a product convenient for use, distribution, handling, display, opening, stacking, re-closing, reuse, dispensing, recycling and disposing of. For example, if there is a straw provided with a ready-to-drink juice, one can easily take it around in cars and use and throw the package.

• Barriers Protection- Many products require protection or barriers from water, dust, oxygen, vapour, etc. In packaging, permeation is a critical factor. Products that need extended shelf life are often packaged along with desiccants. In some food packages, a controlled or modified atmosphere is maintained. The primary function of packaging in such cases is to maintain a clean, sterile, fresh and safe environment for the intended shelf life.

• Security- Packages can have superior tamper resistance so that tampering can be deterred. A package could also have a tamper-evident feature so that one can make out if it has been tampered with in transit or shipping. Such packaging features help in reducing security risks and package pilferage.

Cost of Product Packaging

1. Packaging is very beneficial for marketers. However, there are several factors that influence the cost of packaging. These are:

2. Material Cost: The outer packaging of the products is made from natural or artificial materials. The cost of these materials depends upon their quality. Thus the cost of packaging varies on the basis of the quality of the material used.  

3. Storage Costs- The packaged products are stored in a factory outlet. They are sent to the consumers or shopkeepers. Thus the packaging cost also includes the cost of handling and storing the packaged goods. The cost of storage depends upon the weight and the size of the product. If it is heavy, there will be an extra cost. If the packaging is light, then it will cost less. 

4. Shifting Cost- The product is usually packaged in one place and stored at a different location. Once the packaging is complete, they are shifted to the final storage destination. This involves labour and hence it is considered as an additional cost on the packaging.

5. Operational Cost- The packaging of a product is not a simple and straightforward thing. There are a lot of steps involved in it. Therefore the cost of packaging also depends upon how many phases the product packaging went through. For example, there can be an extra cost of cleaning, beautification, labelling, etc of the package.  

6. Transportation Cost- due to globalisation, products are moving from one place to another. The consumer sitting at one corner of the Earth might want a packaged good from a different country. There is thus an additional cost of the sea or air transportation of such packaged products.

7. Loss and Damage Cost- sometimes while transporting or shifting the goods from one place to another the outer packaging is destroyed. The damage caused on the outside layer of the packaging material is repaired. The loss thus caused is also added to the packaging costs.

8. Insurance Cost- Industries transport both heavy and delicate materials worldwide. While the strong products easily bear the wear and tear of transport, the fragile goods might break easily. Therefore these products are often insured. The cost of insurance is included in the packaging cost of the material.

9. Obsolescence Cost- There are certain factors that cannot be overseen. Sometimes due to no fault, a manufacturer might have to change the material of the packaging. A huge amount might be spent in such a scenario. This change of label or the material of packaging is included in obsolescence cost.

10. Developmental Cost- Different products have different packaging. A lot of industrial-strength is spent in researching what kind of packaging will appeal to the consumers. Whenever new changes or developments take place, a test must be conducted to check its actual strength. Thus developmental cost includes the amount spent on conducting field research, getting consumer feedback, etc.

Conclusion

There are various products in the market, available in a variety of sizes and shapes. Depending upon the need, the customer chooses the product that will be most beneficial to him. However, the desire of a consumer to purchase a product can be influenced by the outside packaging. There are countless examples that attractive packaging makes the customer buy certain products. Apart from an attractive appearance, the packaging of the product plays different roles such as advertisement of the product, communication of the information, protection from wear and tear, etc.