Brand and Packaging

1 January 2017

The Power of Packaging Alice Louw & Michelle Kimber The Customer Equity Company* In recent years packaging has developed well beyond its original function as merely a means of product protection and now plays a key marketing role in developing on shelf appeal, providing product information and establishing brand image and awareness. As packaging’s role in the marketing mix gains momentum, so research into this arena becomes increasingly important. Given the potential for packaging to successfully achieve marketing goals; does research into packaging truly reflects its value within the marketing mix?

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Do we fully understand the role that packaging plays in a marketing environment and how best to leverage this tool to influence consumers? If packaging is so important, what is the best way to measure its effectiveness? * The Customer Equity Company is a wholly owned subsidiary of TNS (UK) which has been set up to develop the marketing sciences and support brand equity and Commitment modelling worldwide. 1 What is packaging? The definitions of ‘packaging’ vary and range from being simple and functionallyfocused to more extensive, holistic interpretations.

Packaging can be defined quite simply as an extrinsic element of the product (Olson and Jacoby (1972)) – an attribute that is related to the product but does not form part of the physical product itself. “Packaging is the container for a product – encompassing the physical appearance of the container and including the design, color, shape, labeling and materials used” (Arens, 1996). Most marketing textbooks consider packaging to be an integral part of the “product” component of the 4 P’s of marketing: product, price, place and promotion (Cateora and Graham, 2002, pg 358-360).

Some argue that that packaging serves as a promotional tool rather than merely an extension of the product: Keller (1998) considers packaging to be an attribute that is not related to the product. For him it is one of the five elements of the brand – together with the name, the logo and/or graphic symbol, the personality and the slogans. While the main use for packaging can be considered to be protection of the goods inside, packaging also fulfils a key role in that it provides us with a recognisable logo, or packaging, so that we instantly know what the goods are inside.

From the consumer perspective, packaging plays a major role when products are purchased – as both a cue and as a source of information. Packaging is crucial, given that it is the first thing that the public sees before making the final decision to buy (Vidales Giovannetti, 1995). Objectives of packaging Packaging and package labeling have several objectives: • • Physical Protection – Protection of the objects enclosed in the package from shock, vibration, compression, temperature, etc. Barrier Protection – A barrier from oxygen, water vapor, dust, etc. • • • • • Containment or Agglomeration – Small objects are typically grouped together in one package for transport and handling efficiency. Alternatively, bulk commodities (such as salt) can be divided into packages that are a more suitable size for individual households. Information transmission – Information on how to use, transport, recycle, or dispose of the package or product is often contained on the package or label. Reducing theft – Packaging that cannot be re-closed or gets physically damaged (shows signs f opening) is helpful in the prevention of theft. Packages also provide opportunities to include anti-theft devices. Convenience – features which add convenience in distribution, handling, display, sale, opening, re-closing, use, and re-use. Marketing – The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Although packaging plays a role in both logistics and marketing, this paper will be focusing mainly on its relevance in the area of marketing. 3

The Relevance of Packaging as a Marketing Tool “Never underestimate the importance of packaging. Marketers often measure consumer brand perceptions and ignore the pack. Yet we know from the way that consumers react to unbranded products that packaging plays a huge role in reinforcing consumer perceptions. Packaging helps to drive the way consumers experience a product. Yet, we spend little time researching the connections between packaging and the direct experience of the product” (Rice and Hofmeyr, 2000, Commitment-led Marketing, pg 216).

Before one can assess or question the current thinking regarding packaging research (and whether the research into packaging suitably reflects its value within the marketing mix), one must first assess whether packaging as a marketing tool really justifies more attention. What relevance does packaging have in the marketing world of today? Reaching the target market In recent years the marketing environment has become increasingly complex and competitive.

Although advertising can be a highly effective means of communication for those consumers who are exposed to it, reaching the entire target market for most products is generally not a feasible prospect. Media fragmentation has meant that it is becoming increasingly difficult (and expensive) to reach and communicate with customers and potential customers, forcing marketers to adopt more innovative means of reaching their target market (Hill and Tilley, 2002). In contrast to advertising, which has limited reach, a product’s packaging is something which all buyers xperience and which has strong potential to engage the majority of the target market. This makes it an extremely powerful and unique tool in the modern marketing environment. In addition to its benefits in terms of reach, some marketers believe that packaging is actually more influential than advertising in influencing consumers, as it has a more direct impact on how they perceive and experience the product. “In most cases, our experience has been that pack designs are more likely to influence the consumer perception of the brand than advertising” (Hofmeyr and Rice, 2000, Commitment-led Marketing, pg 282).

For products with low advertising support, packaging takes on an even more significant role as the key vehicle for communicating the brand positioning (Rudh, 2005, pg. 680). 4 Winning at the First and Second Moment of Truth Packaging’s dual role is what makes it a truly unique marketing tool. Unlike other forms of communication which tend to be fleeting, packaging plays a crucial role not only at the point of sale, but also after the actual purchase of the product. “The packaging has to provide consumers with the right cues and clues – both at the point of purchase and during usage.

The first moment of truth is about obtaining customers attention and communicating the benefits of the offer. The second moment of truth is about providing the tools the customer needs to experience the benefits when using the product” (Lofgrun, 2005, Winning at the 1st… pg 113) The Point Of Sale (The 1st Moment Of Truth) The importance of making an impact at the point of sale cannot be underestimated. “A recent Point of Purchase Advertising Institute (POPAI) survey in the UK found that over 70% of all purchasing decisions are made in-store at the point of purchase. Brand purchases are being made or broken in the ‘final five seconds’. ” (Jugger, 1999) At the point of purchase, packaging serves a number of key functions, namely: 1. 2. 3. 4. Cutting through the clutter – actually getting the consumer to notice/see the product Communicating marketing information Stimulating or creating brand impressions Providing various brand cues: o Value o Quality o Safety Of course, if packaging does not cut through the clutter and catch the consumer’s attention, none of packaging’s other functions even come into play.

The most brilliant and creative packaging is useless unless it is seen. Creating a powerful shelf presence so that the brand stands out from the crowd and is actually noticed is the first and most vital step for any product on a shelf. The average British supermarket contains 25,000 items and the average shopping basket just 39 items (Jugger, 1999). What this fact illustrates is that today’s consumers have to sift through a vast amount of products to choose what they want – and not surprisingly they end up ignoring most of what they pass. 5

In a standard supermarket the typical shopper passes about 300 brands per minute (Rudh, 2005). This translates into less than one-tenth of a second for a single product to get the attention of the customer and spark purchase (Gelperowic and Beharrell, 1994, pg 7). “Even when consumers are actively shopping a product category, most actively view only about a third of the brands displayed” (Young, 2005, p1) So how does one actually cut through the clutter and get the attention of the consumer? Most would agree that “it does not pay to be subtle” (Young, 2005, pg. ) To generate initial consideration, two things are key: 1. Shelf placement – ensuring that your product is placed on the shelf in the area most likely to be seen by customers 2. Packaging that creates a visual contrast (in comparison to its surrounding products) • This can be achieved through the innovative use of colour, a unique shape/structure, a strong logo/brand mark, or a unique visual icon (Young, 2005, pg1) Packaging plays a particularly vital role in categories which have low involvement (e. g. impulse purchase categories like chocolates).

In these categories, consumers tend to be driven by in-store factors and extrinsic cues as they have neither the desire nor the need to comprehensively investigate and assess all the offerings available to them. Even in higher involvement situations, most consumers don’t have the time, ability or information to assess all the pros and cons before purchase. Instead they rely on various cues (e. g. brand name, packaging, etc. ) to help them make their decision (moment of truth article: Zeithaml, 1988). In our experience, most categories have a mixture of customers with high and low involvement levels.

Even categories which are traditionally considered high involvement decisions, such as motor vehicles, have people for whom the decision is made without much consideration – and categories which are often considered to have few involved consumers, such as soap, is an important, deliberated decision and assessed in depth by some. Usage (The 2nd Moment of Truth) “Unlike advertising exposure which can be relatively brief, packaging continues to build brand values during the extended usage of the product and can drive brand equity and loyalty. ” (Rudh, 2005, pg. 80) 6 After purchase, packaging plays both a functional and a marketing role. Functional Role From a functional perspective, packaging is often part of the usage/consumption experience. Not only is it a means of providing any necessary information, but it can also form part of the actual product and provides functional benefits (e. g. being easy to use, fitting into storage space, etc. ). If packaging is unwieldy it can hamper the relationship with the brand – for instance if it breaks easily, doesn’t fit in the fridge, can cut the consumer, etc. the experience with the product can be negative. Marketing Role – Brand Identity and Differentiation As the only part of the marketing communication that the consumer takes home, packaging plays a key role in communicating and reinforcing brand values over time. Packaging has the power to make, but also to break brand relationships. A key example of the latter, is a case cited by Hofmeyr and Rice, where a change in pack design contributed towards a drop in a leading beer brand’s market share by more than 20% in the space of just one year.

Nothing other than the packaging had changed – the product itself had not changed in any way. The pack change, although not dramatic (the same style but with lighter colouring), led to a perception that the beer’s quality had been compromised and that it was now weaker. This caused many previously loyal consumers to lose faith in the brand and to move to the brand’s ‘stronger’ competitors instead. This is a clear example of the power of bad packaging.

Although a non-favourable advertisement might be quickly forgotten, poor packaging (if it remains with the brand throughout its usage cycle) provides a continual reminder of the brand’s perceived failing. Likewise, favourable packaging can be a means of continually reinforcing the brand’s appeal. 7 Doing Something Different – A Tool to Innovate “Packaging is not a gimmick when it works” (Seth Godin, Free Prize Inside, pg. 154) An innovative pack design can help to set a brand apart from its competitors. The marketing world is full of examples of brands that have used packaging to carve a unique position in the marketplace.

Pringles potato chips cylinder and Absolut vodka bottle are widely cited international examples, while in a South African context, recent examples include L’Aubade water bottle (up market coloured plastic bottles that are suitable for virtually any restaurant table), Clover milk easy pour packs (long-life screw top packs) and Country Fresh ice-cream tubs. The popularity of Ouma rusk tins is another testimony to packaging adding value to the product. The design of the pack itself can act as an incentive for purchase (Hall, 1993).

A strong, sturdy mineral water bottle might be chosen over its competitors, not for its content, but rather for its ability to be reused on future occasions. It tastes so good because it looks so good The term ‘sensation transference’ was coined by Louis Cheskin in the 1930’s and is discussed further in the book, Blink, by Malcolm Gladwell. Cheskin was one of the first marketers to notice that people’s perceptions of a product or service were directly related to the aesthetic elements of their design. He believed that people didn’t make a distinction between the product and the package.

Instead how we feel about the package is often transferred to how we feel about the product itself. In essence, for consumers the product is the package AND the product combined. One of the most well known examples of his work is the case of Imperial Margarine (previously called Jelke’s Good Luck margarine). In 1940 margarine was not at all popular in the USA and Cheskin was asked to find out why. Was it because of the intrinsic properties of margarine (i. e. because it tasted bad) or was it because of the associations attached to it? 8 To answer this question, instead of asking people explicitly why they didn’t ike margarine, he carried out a more indirect investigation. He threw luncheons for housewives and as part of the meal served some of them bread with margarine (coloured yellow to resemble butter) and others bread with butter. He then asked the women to fill out questionnaires about the speaker, which also asked them to rate the food. Despite the negative opinions that were found when questioning women directly about the taste and texture of margarine, there were no complaints among those who were given the margarine instead of butter. This clearly showed that the problem was not the margarine itself, but its image.

Cheskin suggested changing the color of Jelke’s Good Luck margarine from the traditional white to yellow. He also suggested changing the packaging material to foil and the name to Imperial Margarine to connote high quality. These simple modifications dramatically improved the product’s sales… and every subsequent brand of margarine has followed this advice (Blink, Malcolm Gladwell). What is important to note is not only the conclusion of the research (i. e. that the packaging of a product affects how we experience its taste) but also the process used to conduct the research.

Rather than using direct questioning in an artificial environment (e. g. a typical focus group scenario) he put the product in the environment where it would actually be used and gauged consumer perceptions indirectly. Asking customers directly how they feel about a product or package is going to result in just that, their perceptions about the package. What is generally more relevant is how the package makes them feel about the product itself. Gladwell raises an interesting point: if we think something tastes or works better because of its packaging, is there any difference than if it really does?

Perception of a food product, for example, has been shown to be affected by a variety of factors including taste, odour, information from labelling and images, attitudes, memory from previous experience, price, prestige, nutritional content, health belief, familiarity and brand loyalty (Krondl and Lau, 1978, 1982; Raats et al. , 1995). If the halo effect created as a result of visual factors truly does modify subsequent product perceptions, then packaging is not just a form of protection or promotion but also serves as a means of improving the overall product experience. 9 Size Really Does Matter

Packaging in different serving sizes can extend a product into new target markets or help to overcome cost barriers. In developing markets such as South Africa, the pack size can mean the difference between the success or failure of a brand in the informal sector. Smaller packages and portions are usually priced at a lower absolute level – making the product more readily affordable to a greater proportion of the population. Some examples of success in this regard include smaller Sunlight and Omo packs servings – which have increased the penetration of these brands substantially.

The popularity of single cigarettes and smaller packs for analgesics have proven that “good things really do come in small packages”. Where smaller packages are not available, entrepreneurial individuals often buy the product and transfer it into smaller non-branded packaging for resale – which completely nullifies all the branding benefits of the original pack. In more developed countries, brands that don’t offer smaller or single-size servings make themselves immediately unsuitable for those living in smaller or single households that do not desire family-size packs.

On the other hand, larger packs can extend the category to a more social environment. For example, the Fruitree 5l juice box expanded the fruit juice category from individual and home consumption to social and catering purposes. The popularity of quart size beers is another example to this… the larger size means that the cost per volume is cheaper and more affordable for the masses. Pester Power In categories in which children are the end consumers, appealing packaging can be a means of driving brand choice. Research has found that “pester power” can come from an attraction to packaging (Gelperowic and Beharrell, pg. ) and as a result packaging can heavily influence mothers’ choices. In a study carried out by Siloyai and Speece (2004), mothers were shown two children’s yoghurt pots: one plain pot and one bright/cheerful looking pot. The mothers were told that both pots contained the same healthy ingredients, but that the bright pot was slightly more expensive. Despite the price premium, 88% of the mothers 10 said they would choose the bright pot – as their children would be more likely to eat it (Gelperowic and Beharrell, pg. 7).

The popularity of Disney-branded products is another case in point of the impact of pester power: Disney co-branded products, from breakfast cereals to plasters to toothbrushes to baking products sell at a premium due to the pulling power the Disney characters have among children. So, with the relevance of packaging undisputed, the question then is: what research has been done to investigate how best to leverage this vital tool? 11 Current thinking and research on packaging Despite the importance of packaging, there is limited marketing research currently available to the public in the field of packaging research.

Most textbooks and literature agree packaging plays a vital role in marketing, but there is little empirical research available investigating its impact on the marketing function and how best to leverage packaging in a marketing context (Rundh, 2005, Rudh, 2005, pg. 670, Sinclair and Knowles, 2006 and Rettie, Brewer, 2000). Looking at what is available (which is by no means extensive) there are some consistent themes in terms of the current thinking with regard to packaging. Different packaging cues impact how a product is perceived

Ampeuero and Vila (2006) conducted research in Spain using packaging prototypes and found that the following aspects of packaging influence customer perceptions: • Colour: Elite products require cold, dark coloured (mainly black) packaging. In contrast, accessible products that are directed to price sensitive consumers require light (mainly white) coloured packaging. Packaging typography: packaging for elegant products usually presents bold, large, roman, upper case letters with expanded characters. In contrast, accessible products of reasonable price are often associated with serif and sans serif typographies.

Graphic forms: high price products appear to be associated with vertical straight lines, squares, straight outlines, and symmetrical composition with one single element. Products directed to the middle classes, use horizontal and oblique straight lines, circles, curves, wavy outlines and asymmetrical compositions. Illustrations: safety guaranteed products and upper classes products are associated with pictures showing the product. In contrast, accessible products directed at price sensitive consumers are more associated with illustrations showing people. • • •

Grossman and Wisenblit, 1999 also found that consumers learn colour associations from current brands in the market, which lead them to prefer certain colours for various product categories (in Rettie and Brewer, 2000). Using colour as a cue on packaging can be a potentially strong association, especially when it is unique to a particular brand. However, people in different cultures are exposed 12 to different colour associations and develop colour preferences based on their own culture’s associations (Rettie and Brewer, 2000). Message placement influences perception

The placement/positioning of messages on the package influence how a package will be read. “Research in psychology on brain laterality, shows that perception is not symmetrical; for instance, words are recalled better if they are perceived from the right-hand side of the individual, while pictorial or non-verbal cues are more successful if coming from the left-hand side. Under conditions of rapid perception, e. g. scanning packs while walking along the aisle in a supermarket, this differential perception and the positioning of the elements in a pack design may make the difference between identifying and missing the item concerned. (Rettie and Brewer, 2000, pg. 56) Brain laterality research has found that verbal stimuli are recalled better when they are on the right-hand side of the visual field, and non-verbal stimuli is better recalled when on the left-hand side of the visual field. If we accept this theory, this would imply that in order to maximize consumer recall, pictorial elements (such as product photography) should be positioned on the left hand side of the package and important pack copy (such as brand name or flavour description) and visuals should be placed centrally or on the right-hand side of the pack.

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