Environmental Influences On Packaging

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Environmental Influences On Packaging

  1. 1. Environmental Influences on Packaging <ul><li>Natural Resources </li></ul><ul><li>Climate </li></ul><ul><li>Ecology </li></ul>Demographics Economics Science/Technology Political/Legal Social Values Marketing Mix Decisions
  2. 2. Evolution of Product Packaging for Coca Cola
  3. 3. Packaging Objectives Protection of Product Function Promotion Imagery Product Label/instruction Product amount Customer demands .. Convenience in use This coffee is the best tasting coffee in the world. That’s because it’s made with 100% arabica beans, the finest beans money can buy. 12 oz. (Containment, Transit, Storage,Tampering) (graphics + color = brand mage) (Size, shape, weight)
  4. 4. <ul><li>Promotional Role (Informing the Consumer) </li></ul><ul><ul><li>Verbal and nonverbal symbols </li></ul></ul><ul><ul><li>Size, shape, texture, color and graphics (graphics + color = brand mage) </li></ul></ul><ul><ul><li>Psychological impact & usage </li></ul></ul><ul><li>Convenience in use </li></ul><ul><li>Environmentally Responsible </li></ul><ul><ul><li>Biodegradable and recyclable </li></ul></ul><ul><ul><li>Ecological impact </li></ul></ul>Packaging Decisions <ul><li>Focus on the wrapping and containment decisions involved in physical design (size-shape-safety) </li></ul>
  5. 5. Major Packaging Considerations <ul><li>Cost of Packaging (production & material) </li></ul><ul><ul><li>Limited consumer willingness to pay for better packaging </li></ul></ul><ul><li>Protection of Product Function </li></ul><ul><li>(Containment, Transit, Storage, Tampering) </li></ul><ul><li>Reseller Needs .. shipping and handling </li></ul><ul><li>Transportation, storage,.. </li></ul>
  6. 6. Product Standardization or Adaptation? Sell product as is Modify product for other country Design new product for new markets Introduce a global product
  7. 7. Domino’s Pizza <ul><li>Satisfy an unmet need/want </li></ul><ul><li>(Food?, Convenience?, Time?) </li></ul><ul><li>Octagon Package </li></ul><ul><li>(Saves Heat) </li></ul>
  8. 8. Product Package Core Product (ring) Tangible Product (packaging) Augmented Product (psychological benefits)
  9. 9. Field Tests for Packaging Analysis <ul><li>A. Laboratory Tests </li></ul><ul><ul><li>Strength / Durability of Material </li></ul></ul><ul><li>B. Dealer Tests </li></ul><ul><ul><li>Storage / Handling / Shape </li></ul></ul><ul><li>C. Visual Tests </li></ul><ul><ul><li>Color / Graphics / Legibility </li></ul></ul><ul><li>D. Customer Acceptance / Usage </li></ul><ul><ul><li>Image / Function/Safety-Tamper Proof </li></ul></ul>
  10. 12. <ul><li>PRODUCT TAMPERING </li></ul>SAFETY FEATURES Tylenol Capsules Listerene Mouthwash Computer Access Plastic wrap Plastic wrap Voice Prints <ul><li>Tamper-Resistant Packaging </li></ul><ul><ul><li>- FDA regulations and consumer safety concerns </li></ul></ul>BATORY’S COOKIES
  11. 13. Multiple Packaging <ul><li>Family Packaging </li></ul><ul><ul><li>Similar packaging for all of a firm’s products or packaging that has one common design element </li></ul></ul>Secondary use small medium large A A A
  12. 14. Ethical Issues In Packaging <ul><li>Issues: </li></ul><ul><li>- Deception: Look alike (knockoffs) </li></ul><ul><li>- Concealing a downsized product </li></ul><ul><li>- Hidden Environmental Effects … </li></ul><ul><li>(glass, paper, plastic) </li></ul><ul><li>- High Costs for “Image” (color, etc.) </li></ul><ul><li>- Safety in use and from tampering </li></ul>FRAGILE
  13. 15. After Years Of Super-sizing, Food Makers Shrink Portions (And Fatten Profit Margins) Wall Street Journal January 28, 2004 Applied Marketing
  14. 16. Company Benefits <ul><li>Profit margins: Can Sell Products at Higher Price per Unit </li></ul><ul><li>Consumer orientation: Smaller portions are in demand by nutritionists and consumers </li></ul><ul><li>The new cans of soda force the consumers to change their mindset about value. </li></ul><ul><li>Relationship Marketing </li></ul><ul><ul><li>“ We’ve got to recruit new users and hold on to users as they age” - Bill Elmore, President , Coca-Cola Co </li></ul></ul><ul><li>Total Quality Management </li></ul><ul><ul><li>Continuous improvement of a product to keep a brand competitive </li></ul></ul>
  15. 17. Company Benefits <ul><li>Can Sell Products at Higher Price per Unit </li></ul><ul><ul><li>Soft Drink Sales </li></ul></ul>After Years Of Supersizing, Food Makers Shrink Portions,(And Fatten Profit Margins),WSJ, 28Jan 2004
  16. 18. <ul><li>Took their popular brand of soft drinks and re-released them in 8oz cans and 12oz. Bottles. (an alternative) </li></ul><ul><li>The product is aimed at light users and aging, weight-conscious baby boomers. . </li></ul><ul><li>Hoagie franchise that just introduced a 4.5 ounce triangular sub called Diamond Mini Meltz. </li></ul>
  17. 19. Consumer Behavior: Advantages <ul><li>A new way to recruit and maintain current product users. </li></ul><ul><li>Storage of product is much easier. </li></ul><ul><li>Sodas do not become warm and flat before you can finish them. </li></ul><ul><li>Reduce temptation to drink too much soda. </li></ul><ul><li>Cans of soda aren't too large for children. </li></ul><ul><li>The product caters to Americas current obsession to loose weight. </li></ul>
  18. 20. Brands of Nestl é <ul><li>Alpo </li></ul><ul><li>Butterfinger </li></ul><ul><li>Hot Pockets </li></ul><ul><li>Libby’s Juicy Juice </li></ul><ul><li>Nestlé Toll House </li></ul><ul><li>Nesquick </li></ul><ul><li>PowerBar </li></ul><ul><li>Taster’s Choice </li></ul>The Perils of Packaging: Nestlé Aims for Easier Openings WSJ, Nov. 17, 2005 Applied Marketong
  19. 21. Why Change the Package? <ul><li>Ease of opening the product (convenience) </li></ul><ul><li>Target markets – kids and aging baby boomers </li></ul><ul><li>On-the-go (in the car, running, etc.) </li></ul><ul><li>Tamper-resistant; hold up during shipment </li></ul><ul><li>Updated, fresh look (Nescafé push button lid) </li></ul><ul><li>Costs </li></ul>
  20. 22. Research <ul><li>“ Ideas are free” </li></ul><ul><ul><li>Customer insights collected from the call center (sent letter and got exclusive rights) </li></ul></ul><ul><ul><li>Called back several hundred customer ideas & gains customer support as well </li></ul></ul><ul><ul><li>Nestlé’s 8 oz. coffee jar too small – made it 15 oz. (sales jumped) </li></ul></ul><ul><ul><li>Pastel-colored packaging of CoffeeMate was too light – brightened package </li></ul></ul><ul><li>Observation: observed runners at mile 17 of 2004 NYC Marathon using PowerGel </li></ul><ul><li>Focus groups – opening lids, discussion of whether they’d purchase the product </li></ul>
  21. 23. Costs of Updating Packaging <ul><li>Costs are biggest problem – raises because of oil prices (ingredient of water bottles, film wrap, etc.) </li></ul><ul><li>Prices for plastic packaging rose 20-35% in 2004 </li></ul><ul><li>Spends $6 billion per year on packaging </li></ul><ul><li>Costs range from less than 1% to 15% of overall cost to make the product </li></ul><ul><li>Re-sealable zip-lock plastic bags add an average of 20% to packages </li></ul><ul><li>However, these options are demanded by consumers </li></ul>&quot;Your most loyal consumers represent 70% of your volume,&quot; says Marty Sharkey. &quot;You'll find the money to keep that group satisfied.&quot;
  22. 24. Relating to Textbook <ul><li>Chapter 2 – Controlling Marketing Strategies </li></ul><ul><ul><li>Nestlé compared their expected level of performance of PowerGel to the actual performance, then took corrective action </li></ul></ul><ul><li>Chapter 3 – Legal and Regulatory Forces (FDA) </li></ul><ul><ul><li>It is mandatory that packaging is tamper-resistant so it must be tough, yet easy to open </li></ul></ul><ul><li>Chapter 5 – International Marketing </li></ul><ul><ul><li>Nestlé is based in Vevey, Switzerland </li></ul></ul><ul><ul><li>Reaches customers all over the world (USA) </li></ul></ul><ul><li>Chapter 7 – Marketing Research </li></ul><ul><ul><li>Collecting Data: focus groups, observation, telephone survey </li></ul></ul>
  23. 25. Relating to Our Textbook… <ul><li>Chapter 7& 8 – Target Markets & Consumer Behavior </li></ul><ul><ul><li>Demographics: Age and family </li></ul></ul><ul><ul><li>Behavioristic: Brand loyalty, price, end use </li></ul></ul><ul><li>Chapter 11 – Product Concepts </li></ul><ul><ul><li>Product line: Pet care, baby food, beverages, prepared foods, chocolate and candy, dairy products, bottled water, breakfast cereals, ice cream, food services </li></ul></ul><ul><li>Chapter 12 – Developing and Managing Products </li></ul><ul><ul><li>Quality/Functional/Aesthetic Modifications: more convenient, appealing, and durable </li></ul></ul><ul><li>Chapter 13 – Branding and Packaging </li></ul><ul><ul><li>Nestlé is a major brand name </li></ul></ul><ul><ul><li>Altering the package (updated the style) and innovative packaging (unique and easier to use) </li></ul></ul>
  24. 26. References <ul><li>Ball, Deborah. &quot;The Perils of Packaging: Nestlé Aims for Easier Openings.&quot; Wall Street Journal 17 Nov. 2005: B1. </li></ul><ul><li>&quot;FPA Congratulates Its Winners.&quot; 2001. Flexible Packaging Association. 28 Nov. 2005 <http://www.flexpack.org/achiev/2001winners.asp>. </li></ul><ul><li>Moore, John. &quot;Ideas are Free ... just ask Nestle.&quot; Brand Autopsy . 15 Sep. 2004. 28 Nov. 2005 <http://brandautopsy.typepad.com/brandautopsy/2004/09/ideas_are_free_.html>. </li></ul><ul><li>&quot;Smarties set to lose their tube .&quot; Online posting. 18 Feb. 2005. Do you have fond memories of the Smarties tube?. 28 Nov. 2005. <http://news.bbc.co.uk/1/hi/business/4276553.stm>. </li></ul><ul><li>Toops, Diane. &quot;Food Biz Kids: Perfect easy-to-go brownie.&quot; Food Processing Magazine . 28 Nov. 2005 <http://www.foodprocessing.com/articles/2005/299.html>. </li></ul>
  25. 27. <ul><li>“ Green Labeling” : </li></ul><ul><ul><ul><li>Labeling packaging as made of recyclable materials </li></ul></ul></ul><ul><ul><li>Provide information on product origin </li></ul></ul><ul><ul><ul><li>“ Made in the USA” </li></ul></ul></ul><ul><li>Universal Product Code (UPC) </li></ul>Section 2 Package Labeling 1st
  26. 28. Asparagus From Afar Kilman, Scott. “Grocers, Meatpackers Fight Law to Label Origin of Foods.” WSJ, June 26, 2003
  27. 29. Whacky Warning Label Contest <ul><li>1 st Prize Label on Drain Cleaner Bottle “if you do not understand , or cannot read, all directions, cautions and warnings, do not use this product”. </li></ul><ul><li>2 Nd Prize Snow sled label “Beware: sled may develop high speed under certain snow conditions” </li></ul>Applied Marketing
  28. 30. - Tough-guy - Smooth-guy - Macho-guy Target Market : Men, Ages 21-29 Molson Campaign Spoofs the Genre Applied Marketing
  29. 31. Some of the new labels include: <ul><li>I Put the Super In Superficial Lager </li></ul><ul><li>Guess Where My Tattoo Is Lager </li></ul><ul><li>Let’s Get Out Of These Wet Clothes Lager </li></ul><ul><li>Skinny Dippers Are People Too Lager </li></ul><ul><li>Ask Me About My X-Ray Vision Lager </li></ul><ul><li>http:// www.twinlabel.com/main.php </li></ul>Applied Marketing
  30. 32. Money spent on advertising in 2001: <ul><li>Molson- $3.1 million </li></ul><ul><li>Anheuser-Busch- $331.7 million </li></ul><ul><li>Heineken- 69.2 $million </li></ul><ul><li>Product Differentiation </li></ul><ul><ul><li>Molson hopes to set their beer apart from its competitors by introducing new humorous labels on their products to attract more consumers </li></ul></ul>
  31. 33. Labeling Information Value <ul><li>Source of Product (who,when,where) </li></ul><ul><li>Content Identification </li></ul><ul><li>Use of Product-instructions ( # of Servings.etc.) </li></ul><ul><li>Promotion: graphic design </li></ul><ul><li>Legal </li></ul><ul><li>Potential Hazards </li></ul><ul><li>Nutrition </li></ul>
  32. 34. Nutrition Facts & Points of Confusion Parker-Pope, Tara. “A ‘Fat-Free’ Product That’s 100% Fat: How Food Labels Legally Mislead.” WSJ, D1, July 15, 2003.
  33. 35. Ethics + Product Labeling A case example <ul><li>Wineries & Gov’t Class over Ads that Toast Health Benefits of Drinking </li></ul><ul><li>CBS 60 Minutes suggested that moderate wine consumption may reduce the risk of heart disease... </li></ul><ul><li>Red wine sales soar... </li></ul><ul><li>Gov’t threatened to close a winery down </li></ul><ul><li>First Amendment Issue?...(No) </li></ul>
  34. 36. <ul><li>Measure 27 - Require food companies to label products that contain genetically modified ingredients </li></ul><ul><li>More likely to be approved by consumers than politicians </li></ul>Oregon May Require Labels on Genetic Food Case example
  35. 37. GENETICALLY MODIFIED INGREDIENTS <ul><li>70% of processed food contains genetically modified </li></ul><ul><ul><li>Corn </li></ul></ul><ul><ul><li>Soybean </li></ul></ul><ul><ul><li>Other crops </li></ul></ul><ul><li>Have not been shown to cause health problems </li></ul><ul><li>Resist pests and weed killers </li></ul><ul><li>Easier for farmers to grow </li></ul>
  36. 38. ANTI-LABELING GROUP <ul><li>Special packaging just for Oregon </li></ul><ul><li>Costly headache for farmers, food makers, and supermarkets </li></ul><ul><li>Anti – label group members </li></ul><ul><ul><li>Crop Life International </li></ul></ul><ul><ul><ul><li>PepsiCo Inc. </li></ul></ul></ul><ul><ul><ul><li>General Mills Inc. </li></ul></ul></ul><ul><ul><ul><li>Kellogg Co. </li></ul></ul></ul><ul><ul><ul><li>Sara Lee Corp. </li></ul></ul></ul><ul><ul><ul><li>H.J. Heinz Co. </li></ul></ul></ul>
  37. 39. PRO LABEL GROUP <ul><li>“If food is safe and the technology is great, why not put a label on it and let me have a choice” </li></ul><ul><li>“Give Oregonians a choice” </li></ul><ul><li>Have more than 100,000 signatures and 7 other states are interested </li></ul><ul><li>Perishable products are produced locally </li></ul><ul><ul><li>easier to comply with state labeling law </li></ul></ul>
  38. 40. Section 3 Packaging & Color <ul><li>Product Congruency & COLOR </li></ul><ul><li>1. Competitive </li></ul><ul><li>2. Believable </li></ul><ul><li>3. Consistent </li></ul>
  39. 41. COLOR Theory <ul><li>Color carries a connotation influenced by: </li></ul><ul><li>- Culture </li></ul><ul><li>- Personal memories </li></ul><ul><li>- Physiology </li></ul><ul><li>Principle: Color influences product sales </li></ul><ul><li>Colors send different signals </li></ul><ul><li>(conscious and unconscious) </li></ul>
  40. 42. Kraft Cheese <ul><li>Objective: to increase packages eye appeal </li></ul><ul><ul><li>Shelf appeal: make their products stand out from the rest </li></ul></ul><ul><ul><ul><li>Consumer Behavior: Kraft is trying to make a bigger splash at the dairy case because most shoppers spend just 1 ½ seconds before choosing a brand </li></ul></ul></ul><ul><ul><li>Tactic: use catchy colors & animation, Example - cow </li></ul></ul>Applied Marketing <ul><li>Kraft is also working to give cheese a healthier, sexier image “Love it… Gotta Have it” </li></ul>
  41. 43. COLOR VISIBILITY <ul><li>Color ads produces 35% increase in readership versus Black & White. </li></ul><ul><li>Orange - 118% </li></ul><ul><li>Yellow - 113% </li></ul><ul><li>Blue - 100% </li></ul><ul><li>*10% of the population are color blind </li></ul><ul><li>Package Size: Increases w/lighter colors </li></ul><ul><li>Decreases w/darker colors </li></ul><ul><li>(Mc Neal,J., C. B. 1982) </li></ul>Sample size
  42. 45. Color Associations <ul><li>Orange : Conveys strength - fall, harvest. </li></ul><ul><li>Blue & White : Clean and gentle. </li></ul><ul><li>Red : Symbolizes blood & fire. </li></ul><ul><ul><ul><li> Masculine in appeal. Anger & action. </li></ul></ul></ul><ul><ul><ul><li>Stimulates appetite & desire. </li></ul></ul></ul>
  43. 46. Color Associations <ul><li>Blue : cool, truthful, formal, purity, loyalty. </li></ul><ul><li>sky,sadness, water,coldness </li></ul><ul><li>Green : wet, nature, calmness, spring. </li></ul><ul><li>(also molds, bacteria, spoilage) </li></ul><ul><li>Black : mystery, mourning, death, heaviness </li></ul><ul><li>Yellow: sunlight,caution,warmth,visibility </li></ul>Snow days
  44. 47. Cultural differences in Color Associations <ul><li>Beware when bearing gifts on foreign lands - and beware of the color... </li></ul><ul><li>Brazil - Purple is a death color, Scotch is more popular than bourbon </li></ul><ul><li>England - Apparel and soap are considered a bit personal. White lilies suggest death, but other flowers are okay </li></ul><ul><li>Hong Kong - White is for funerals, but Red is popular in all Chinese-speaking areas. </li></ul>

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