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  • 1. REVIEW OF LITERATUREAnderson, D.W. and G.A Zarkin in their study stated that Nutritional labeling is found to affect theconsumer purchase behavior significantly. Some evidence reveals that provision of nutritionalinformation may allow consumers to switch consumption away from unhealthy products in those foodcategories toward healthy products in food categories more easily. If the products are not labeled,consumers may not be fully aware of their nutrient content. Consumers must form their own beliefs aboutnutrient content based on advertising, public health messages, and their general knowledge of foodscience. However, this eventually leads to underestimates or overestimates of the content of particularnutrients in unlabeled food items.Anderson, D.W. and G.A Zarkin, “Consumer and producer Responses to Nutritional LabelChanges”, American Journal of Agriculture Economics. No. 74, pp .1202-1207,1992 Caswell and Padberg, in their study revealed that improvements in nutrient intake of thepopulation depend on the interaction of demand and supply forces in food markets. On the demand side,consumers’ interest in the purchase of diets and products with improved nutritional profiles has a directeffect on nutrient intake. Consumers’ ability to choose their diets depends partly on the quantity andquality of information available through a variety of sources, including nutrition panel food labels. Theyfurther state that income does not necessarily indicate a higher willingness to pay for nutritionalinformation on food items. The level of education is considered to have a positive relationship withnutritional label use. Among the other factors considered during food shopping such as price, quality,packaging, label, and brand, the highest level of importance was attached to nutritional labeling on foodproducts. This particular finding suggests that printed nutrition information is an important source of“new knowledge” that consumers use in purchasing. Out of the total number of 90 respondents, 52.2%were willing to pay something additional for products with nutrition information and 47.8% were notwilling to pay anything additional.Caswell and Padberg, “Towards a More Comprehensive Theory of Food Labels”, AmericanJournal of Agricultural Economics, No.32, pp28-35 ,1999 Govindasamy and Italia in their study have concluded that females are more likely to usenutritional labeling than males and have shown that sex play a major role in buying behavior. Age isfound to be significantly influencing the use of nutritional labeling where younger individuals are morelikely to use nutritional labels than older individuals. Moreover, level of education is considered to have apositive willingness to pay for nutritional information on food items.Govindasamy.R and J.Italia, “Evaluating Consumer Usage of Nutritional Labelling: The Influenceof Socio- Economic Characteristics”, Journal of Nutritional Education,No.4, pp.370-375, 1999 India has sufficient rules and regulations for mandating the production and supply of safeand quality food products in the market. However, operational and institutional mechanisms forenhancing the efficiency and effectiveness of this legislation require urgent attention. In mostcases, imported packaged food products carry ingredient details in foreign languages and lackuniformity in labeling information. A recent report on food labeling in the U.S. indicates thatfood import refusals due to labeling violations were caused by lack of required nutritionalinformation (25%), failure to list the common or usual name of each ingredient (18%), failure toaccurately state the product’s weight, measure, or numerical count (13%), and failure to providethe label in English (12%) as required by the U.S. Food and Drug Administration.
  • 2. Dr. Jabir Ali, “India Moves to Tighten Food Labelling Laws”, Food Quality Magazine,No.13, October/November 2011 Wells, Farley & Armstrong, stated that in today’s competitive business environment, therole of packaging has changed due to the consumer’s lifestyle change & increasing self service.Packages act as a very good tool of sales promotion, which also stimulates consumer impulsivebuying behavior which increases market share and cuts various costs involved in marketing.Wells.L.E, Farley, H.F & Armstrong. G.A, “The Importance of Packaging Design for Own-Label Food Brands”, International Journal of Retail & Distribution Management,Volume.35, Issue. 9, pp.677-678Soroka has revealed that packaging is the science, art and technology of enclosing or protectingproducts for distribution, storage, sale and use. Packaging can be described as a coordinatedsystem of preparing goods for transport, warehousing, logistics, sale and end use. Packagingcontains, protects, preserves, transports, informs and sells.Soroka “Fundamentals of Packaging Technology”, Institute of Packing Professionals, ISBN1-930268-25-4, 2002.P.H.K.Prathiraja and A.Ariyawardana state that in Sri Lanka, the general requirements for foodstuffs are laid down in the Food Act , No. 26 of 1980 as amended. Compositional requirementsfor certain foods are laid down in the Food Regulations 1994. However, in Sri lanks inclusion ofa nutritional label is not a legal requirement, hence; many products enter the market without anutritional label. Given the liberalized environment in Srilanka, local food producers faceimmense competition from the imported products and from the products of multinationalcompanies that have nutritional labels. Consumers have a better selection for their money.Therefore it is imperative to study the impact of Nutritional Labelling On Consumer BuyingBehaviour.P.H.K.Prathiraja and A.Ariyawardana “ Impact of Nutritional Labelling on ConsumerBuying Behaviour” Sri Lankan Journal of Agricultural Economics,Vol 5 No 1,2003.In the study conducted by the National Institute of Nutrition it is stated that the production, saleand consumption of pre-packaged foods have witnessed a majorsurge in the recent years in bothdeveloped and developing countries. Food labelling is one of the important population-basedapproaches that can help consumers make healthy food choices by providing the necessaryinformation about the food on the pack. The food label is one of the most important and directmeans of communication of product information between buyers and sellers. said that a package attracts consumers’ attention to a particular brand, enhances itsimage, and influences consumers’ perceptions about a product. The research result shows the impactof different package elements on consumers’ purchase decisions can be stronger.
  • 3. She concludes that a package could be treated as one of the most valuable tool in today’s marketingcommunications, which necessitates more detailed analysis of its elements and an impact of thoseelements on consumers buying behavior.Kuvykaite Rita , Aiste Dovaliene, Laura Navickiene .”Impact of Package Elements onconsumer Purchase Decision”. Kaunas University of Technology, Journal of Economics &Management (2009.14) ISSN 1822-6515.Sharma in his paper studied New Consumers Products Branding, Packaging and Labeling in Nepal,while focusing on existing practice of branding, packaging and labeling of new products in consumerproduct manufacturing units. He concluded that the majority of the consumer product manufacturers,84.37% (27 out of 32 responses) are using product labels as a simple tag attached to the product or anelaborately designed graphic that is a part of the package.Sharma “New Consumers Products Branding, Packaging and Labeling in Nepal” 2008.Blackman has concluded that current shifts in food trends of consumers has led to changes in normalday to day food marketing to a focus on healthy food marketing, hence impacting on consumer’sbehavior. The impact of the change is more apparent on consumers perception, tests and needsincluding changes in products (foods) that are being manufactured and their subsequent positioning.These changes have increased consumer awareness and have led to the demand for healthy food andinformation on the content of the food they consume.Blackman,C(2005). “A Healthy Future for Europe‟s Food and Drink Sector?” Foresight,Volume 7 No.6, pp.8-23Petterson and Fjellstorm, state that it is now common for packaging and communications to containtags such as “Trans fat free” or “ with no added sugar” as marketers look to reassure consumers thattheir offerings will have no negative impact on consumers and their family’s health. He alsoemphasized the importance of healthy eating trends in the food industry by describing it as a warwith “food and health as the key battle front” . It is now becoming common knowledge that in orderto satisfy customers, like product packaging, and provision of clear nutritional content of theirproducts, particularly where products could be seen as being marketed towards vulnerable groupssuch as children.Petterson .A and Fjellstorm .C (2006)”Responsible Marketing To Children And theirFamilies”. Young Consumers: Insights and Ideas for responsible Marketers, Volume 7, No.4,pp.13-18.Hill and Tilley carried out a study with consumers, to determine whether packaging has an impact onthe preferences of children and their related decision making processes. Through focus groups, theyconcluded that all children have a preference for the different kind of characters printed on theproduct packages. This emphasized for the use of characters in communication with children.Hill and Tilley (2002) “Packaging Of Children‟s Breakfast cereal” British Food Journal,Volume 104,No.9, pp 766-777
  • 4. Roberts states the concept of “eatertainment, that is children may respond to food products notnecessarily because of the nutritious nature but for the fun or perceived imaginary or actualentertainment to be enjoyed. He also found that colour was an important element in food choice.Products marketed towards children are brightly coloured in order to attract their eye and make themseem fun and exciting.Roberts.M (2005) .”Parenting In an Obesogenic Environment”. Journal of Research forconsumers, No.9.Siloyoi and Speece, studied that the package’s outlook and features give it the most suitableuniqueness and originality it needed. The various features like quality are being self explained by thepackage, if a package explains that it has high quality, then consumers will also think on similar linesfor the product and likewise, if it has poor packaging, then it will be very difficult to convince aconsumer that the package contains a good product.Siloyoi and Speece,(2004). „Packaging and Purchase Decisions”. British Food Journal, Volume106, No.8, pp 670-684.Underwood et al. narrates that consumers are more likely to spontaneously imagine aspects of how aproduct looks, tastes, feels, smells or sounds while viewing product pictures on the package. Thepackage becomes the symbol that communicates favourable or unfavourable implied meaning aboutthe product.Underwood et al. R.L., Klein, N.M., & Burke, R.R (2001). “Packaging communication:Attentional Effects of Product Imagery”. Journal of Product & Brand Management, Volume10, Issue 7, pp.403-422.Imram studied that expectations for the food products in a package can be easily generated from thevarious factors such as packaging, labeling product information and stereotypes. The effect of colouris the most obvious and well studied. Consumer perceptions of an acceptable colour are associatedwith perceptions of other quality attributes, such as flavor nutrition, and also with satisfaction levels.Positive effect can be achieved by manipulating one or more packaging variables, includingpackaging colour, clear packs that allow viewing food colour, incident light, nomenclature and brandname appearance. He also added that in food service, the food products chosen for display and saleby caterers are selected for their colour and appearance attributes.Imram, N.(1999). “The Role of Visual Cues in Consumer Perception and Acceptance of a FoodProduct.” Nutrition and Food Science, Volume 5, September/ October, pp.224-228.Brown and Schrader in their study state that Consumers can use the nutritional label to make foodchoices according to the Dietary guidelines developed by health experts who emphasize theimportance of a well-balanced diet. Consumers identify foods with certain nutritional qualitiesrelated to risk factors and wellness by using the health claims which appear on the front of foodpackages. These are the claims about the relationship between a nutrient or a food and the risk of adisease or health-related condition.Brown, D.J. and L.F. Schrader. (1990). Cholestrol Information and Shell Egg Consumption.American Journal of Agricultural Economics.72:548-555
  • 5. Stigler, specifically models the consumer’s search for information which itself has been shown to beinfluenced by individual characteristics and many other characteristics. Working within thisclassification system, nutritional label use was modeled as a function of several major categories ofvariables including individual characteristics such as sex, age, education, household size, special dietstatus and monthly income.Stigler. G.J(1961) The Economics of Information. Journal of Political Economy. 69(3):213-222APO stresses that nutritional labels can simplify the whole concept of healthy eating. It helps to keeptrack of the amount of fat and sugar, sodium and fiber, protein and carbohydrates. It also allowsconsumers to make an informed judgement of a product’s overall value.Asian Productivity Organisation.(2002). Food Standards and Labeling Systems in Asia and thepacific. Tokyo:Asian Productivity Organisation.Prathiraja and Ariyawardana in their study found that 86% of the respondents had an awarenessabout the nutritional labels on food products, while 14% did not have awareness about nutritionallabels. This particular finding suggests that there is a consumer propensity to read nutrition labels andit could change their purchasing behavior, which ultimately reflects their relative valuation of tasteversus health. Further they state that, out of 90 respondents 77.8% considered that nutritionalinformation on food items are vital for their purchasing decisions. Among the other factorsconsidered during food shopping such as price, quality, packaging label and brand the highest levelof importance was attached to nutritional labeling on food products. This particular finding suggeststhat printed nutrition information is an important source of “new Knowledge” that consumers use inpurchasing.P.H.K. Prathiraja and A.Ariyawardana. “Impact of Nutritional Labelling on ConsumerBuying Behaviour”. SriLankan Journal of Agricultural Economics. Volume-5. No.1. 2003.pp39-40.Bender and Derby concluded in their study that females are more likely to use nutritional labelingthan males and have shown that sex play a major role in buying behavior. Age is found to besignificantly influencing the use of nutritional labeling where younger individuals are more likely touse nutritional labels than older individuals.Bender, M.M and B.M Derby.(1992) Prevalence of Reading Nutrition Information andIngredient Information on Food Labels among Adult Americans. Journal of NutritionEducation.24:292-297.In the Journal of Marketing science the consumer perceptions and preferences regarding foodlabeling and the information displayed in the packaging of food products with particular emphasis onnutrition facts have been evaluated, Nutritional labeling are phrases used by business to inform theconsumer about the nature of their product. As far as packaging is concerned it should be eco-friendly.Academy of Marketing Science- “Packing and Nutritional Labelling in India”.
  • 6. M.Sakuntala in her study states, in the present age of consumer orientated marketing approachpackage has gained unique importance. Packaging is a sales tool for promotional mix. Packagedesign gives comparative strength, cost of materials and shape. It must attract the customer, holdtheir interest and build their desire to buy. Its color, size and shape also helps the promotion of theproduct. It was further stated in the study that respondents belonging to the group of below 20 yearspreferred packing as their first choice and given least preference to publicity.M. Sakunthala(2006) “A study on the effectiveness of promotional mix with special referenceto LG products in Coimbatore City”.K.Deepa found in her study that 92 respondents 61.33% check the manufacturing /expiry date onpackage whereas 58 respondents 38.67% do not check the above details which shows the importanceof package and the necessity of disclosure of necessary information on packs.K.Deepa(2006) “A Comparitive Study on Brand loyalty of Biscuits with Special reference toBritania and Parle in Erode District”.Mohit Khattar narrates in his article the role of Packaging as “ Products that are consumed daily orby a large percentage of the family members typically do better with large sizes, whereas productsconsumed infrequently or by some members of the family do well with smaller sizes.Mohit Khattar(2010 Jan) Managing Director, Nature‟s Basket Limited -“What is your Pick,Big or Small”.Akerlof attributed that in markets where sellers have information about product quality that cannot becredibly conveyed to the buyers, only poor-quality products will be sold and, in the extreme case themarket may collapse. The importance of labeling is not less in Indian scenario. The country is already ona verge of massive expansion in thefood processing sector as envisaged in the Government plans that thesector will grow by three fold from470 billion in 2005 to around 4210 billion in 2015: the level ofprocessing of perishables will increase from 6% to 20%: value addition will increase from 20% to 35%;and share of country’s exports will increase from 1.5%to 3%. The expansion in the sector can beattributed to various demand and supply side factors. On demand side, increased real wages, more womenin labor force and changing lifestyles have increased the value of time and demand for convenience. Onsupply side, the technological advancement in food processing have enabled industries to provide varietyof processed food and bevarages. With the huge expansion prospects of food business in India, themandatory labeling will only ensure efficient functioning of markets. Also, with quality and food safetyissues becoming pertinent in the post WTO scenario, Indian companies also need to follow qualitymanagement systems in accordance to global standards. Regulation to make nutritional labelingmandatory in the country is only another step in this direction of making Indian companies competitive.Akerlof.George.A(1970), “The Market for Lemon: Quality Uncertainty and MarketMechanism”.”Quarterly Journal of Economics 84(3): 488-500Golan,et al., states that nutritional contents of a food product are credence attributes, which are not knownto consumers from inspection or even after consumption. Food companies, however, have suchinformation as they know about the ingredients and the method of processing. This creates asymmetry ofinformation in the market. In fact, there are two important reasons cited in the economic literature for
  • 7. mandatory labeling. One is to correct asymmetric or imperfect information and the other being to correctexternalities. However, labeling is the most appropriate tool if consumer preferences differ widely withrespect to product characteristics. Labels may help confused consumers make choices that better reflecttheir preferences. In case of government intervention in labeling, one goal is to influence individualconsumption choices to align them with social objectives.Golan Elise,Kuchler Fred and Mitchell Lorraine(2000), “Economics of Food Labelling”,Agricultural Economic Report, No.793, Economic Research Service, U.S Department ofAgriculture, December.The European Advisory Services have reported that the nutritional information would always beadvantageous to consumers in making the informed choices, but there is going to be cost associated withit even if it is only a one time cost. The cost of labeling for food companies are in terms of administrativecosts as interpretation of the labeling requirements etc, laboratory analysis of food for ascertainingnutrient contents, printing costs due to change in labels and reformulation costs. As per the study onimpact of mandatory nutritional labeling in European Union, 49% of the respondents indicated that thecosts incurred due to the introduction of mandatory nutrition labeling would have a significant impact onthe costs of the final product. The impact was felt most heavily by smaller companies with turnover under62 million with 62 percent of the companies considering it as a significant cost .EAS(2004) “The Introduction of Mandatory Nutritional labeling in the European Union-ImpactAssessment Undertaken for European Commission,” Report prepared by European Advisoryservices, Brussels, November 30.Economic Research Service Us reports that in US the Nutrition, Labelling and Education Act of1990(NLEA) required mandatory nutrition labeling for almost all packaged food and set strict regulationsfor health claims. The cost of NLEA over the period of 20 years were estimated as $163 million forGovernment and $1.4 billion to $2.3 billion for the food industry. As per estimates, the total U.S trade inprocessed foodsand bevarages amounted to $54.2 billion in 1995.ERS(1997). “Globalisation of the Processed food Market. Agricultural Outlook, EconomicResearch Service”, United States Department of Agriculture.January-February.Ippolito and Mathios found that health claims on cereal boxes helped change consumer behavior andresulted in significant product innovation. In fact, more healthful foods resulting from reformulation maybe the largest benefit of labeling.Ippolito , Pauline.M and Mathos Alan D(1990). “Information Advertising and Health Choices: AStudy of the cereal Market.”Rand Journal of Economics, 21(3):459-480Beales state that the reformulation cast would be an issue of concern for the small food companies andwould, therefore need technical and financial assistance from the Government. Not withstanding the costissues, mandatory nutrition labeling policy provides incentives to the companies excelling in higherquality characteristics of the product. In fact nutrient information could be used to create productdifferentiation and consumer assurance for the credence attributes of the product.Beales. H. (1980), “Benefits and costs of Label Information Programs in Product Labelling andHealth Risks” BAnbury Report 6 pp 243-260.
  • 8. Economic Times ,The demand for higher quality attributes for food products would also compel industryplayers to approximately address the food safety and quality issues. In fact, many food companies havealready started reformulating their existing products to reduce saturated fat, cholesterol, added sugar andsodium in line with global trends.ET(2009) “Global F&B Giants Planning Healthy Tag for Indian Market,” Economic Times, Delhiedition, July 13.Thamarai Kannan in his study about marketing problems of turmeric growers have stated that after thecompletion of curing and processing of turmeric, it is packed in gunny bags and then taken to the marketcentre. Aunique feature prevailing in the turmeric market is that the packing material are supplied, rentfree of cost to the turmeric growers by the commission agents and co-operative marketing societies. Itwas observed that the packing materials which were supplied by the commission agents and co-operativemarketing societies are not of good quality and condition , which leads to many problems. He further concluded that if the packing materials are not of good quality and condition, duringtransit and during loading and unloading heavy loss of weight may occur. In order to avoid this problem,good quality packing material should be provided.Thamarai Kannan(Dec 2001) “A study on the Marketing Problems and Prospects on TurmericGrowers in Tamilnadu.”Satchidanand Rath and Gaur K.D in their study on “A Critical Review of Nature of Liability under thePrevention of Food Adulteration Act” have stated that the percentage of adulteration incase of MilkProducts are extremely high and covers 51% of the total prosecutions. Vanaspathi, edible oil and preparedfood are the next in degree of adulteration above grains , grams and spices. They have also pointed outthat adulteration was rampant more in the urban areas than in the rural areas and mostly vendors areindulged in such type of activities rather than manufacturers, stockists and distributors. Finally they haveinsisted the need for efficient and incorruptible machinery to look after these evil effects.Satchidanand Rath and Gaur.R.D(1983)” ““A Critical Review of Nature of Liability under thePrevention of Food Adulteration Act”, University of Utkal Indian Dissertation Abstract(January-March) Pg66-69.Natarajan conducted a study on Consumers Awareness towards ISI mark. It was observed that theawareness level is high and medium among 34.4% and 55.56% of the consumers respectively. It wasfurther observed that the consumers have favourable attitude about the quality and the performance of ISImarked goods.Natarajan.K (1990) “Consumer Awareness Towards ISI Mark”, Indian Journal of MarketingVolume No.6(Feb) pg 16-21.Advani Rani State that the trend of making a large number of items available in a pre packedcondition is picking up very fast. Here comes the question of protecting the interests of theconsumers. As the commodity is pre-packed, a consumer does not know at the time of purchase thequantity, quality, type , number or size of the contents. With a view to protect the consumers, the actprovides for certain rules concerning the packaging of commodities. Sec 39 of The Standards ofWeights and Measures Act 1976 prohibits the manufacture, packing, sale, distribution or delivery ofany commodity in package bears plain and conspicuous declaration in the prescribed manner
  • 9. regarding its identity, net quantity in terms of standard weights and measure, the sale price, the nameof the manufacturer and the distributor. It is mandatory that the declaration made on the package be legible, prominent, definite,plain, unambiguous, conspicuous as to size, number and colour as far as practicable in such style ortype of lettering as to be boldly, clearly and conspicuously presented in distinct contrast to other type.Advani Rani(1990) consumer Protection Act and Its Implications, Ahmedabad: ConsumerEducation Research Centre.P.Santhi states that milk is considered the best, ideal and near complete or the balanced food. Forvegetarian food habitat people, milk is the only health tonic, particularly during recovery after illness.In the study it was found that about 57% of the sample respondents expressed nutritive value of“milk” as most important factor for purchase. He added that packaging has become a potentmarketing tool in case of branded pasteurized sachet milks. The fluid milk marketers however treatpackaging as an element of product strategy. Well designed packages can create convenient value forthe consumer and promotional value for the producer. He further specifies the importance oflabeling. Label contains information required by law and other information that is attached to theproduct or designed as a part of the package. Label incase of branded fluid milk is a part of thepackage. Label perform several functions such as identification of product, description about theproduct and as well as promote the product sales.P.Santhi (July 2005) “A study of Buyer-Behaviour of Urban households in Fluid Milk Marketswith Reference to Coimbatore District.”Kirubashini studied that with the development of standards and the Consumer Protection efforts ofthe government the consumer organizations are in a better position to play an important role inprotecting and educating consumers. Consumers are deceived in a number of ways like Rampentadulteration, Substandard quality of products, Shortweights and measures, short supply of goods,exorbitant pricing, deceptive packaging and labeling. Deceptive labeling includes creating falseimpression through over emphasizing the qualitative features of the content that deceives theconsumers. The consumers are also deceived by the superlatives and false information given in thelabel. Some products are affixed with labels containing only the names of the products, lackinginformation about the address, date of manufacturing and the methods of usage.B.KIRUBASSHINI (Apr 2003) “ A Study on Consumer Protection in Coimbatore District withReference to the Role of Voluntary Consumer Organizations and the Awareness AmongConsumers.”