EFFECT OF PACKAGING AND DESIGN STRATEGY ON A PRODUCT.

BY

UDO ESTHER EDET

AKP/WRR/BMG/BUS/ND2007/0020

THIS RESEARCH WORK ISSUBMITTED IN PARTIAL FULFILLMENT FOR THE REQUIREMENT

OF HIGHER NATIONAL DIPLOMA COURSE MARKETING MANAGEMENT, DEPARTMENT OF BUSINESS

ADMINISTRATION. AKWA IBOM STATE POLYTECHNIC. IKOT OSURUA.

APRIL 2010

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TABLE OF CONTENTS

ITEMS PAGE

Table of content 2Dedication 3Abstract 4Introduction 5Background of the study 5Statement of the problem 8Objective of the study 9Hypothesis 10Significance of the study 10

Review of the related literature 11Concepts of packaging 11Functions of packaging 14Sales function 16The levels of packaging 18Packaging environment 19Packaging materials 21Effect of packaging and design 22

Summary and conclusion 23References 24

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DEDICATION

This term paper is dedicated to the Almighty God for His ever enduring

love, kindness, mercy and grace all through the course of this

programme. Father, I thank and worship you and give You all the Glory

and Honour.

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ABSTRACT

Packaging is an integral part of the goods supply chain. It helps to protects goods from

damage, allows efficient distribution, informs the consumer and helps to promote goods in a

competitive market place. The main objective of the study was to determine the role of

packaging as a marketing strategy in the firm under consideration. The subsidiary objectives

include to determine whether packaging ensures the safety and quality of products – from

manufacture through to storage, distribution and consumption, whether packaging

contributes to product appeal, provides convenience and communicates information eg on

nutrition and serving instructions.

The research has shown that consumers are willing to pay a little more for the

appearance and prestige of better packaging as a result of the rise in consumer

affluence. In addition, the growth of discount stores, departmental stores and

supermarkets has meant that the package must now perform many of the

promotional functions. This means that it must attract attention, suggest something

desirable inside it in the mind of the consumer and make an overall favourable

impression.

It was recommended that management should pay more attention to the promotional

aspects of good packaging in developing specific packaging policies.

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CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

Packaging is the processes (such as cleaning, drying, preserving) and

materials (such as glass, metal, paper or paperboard, plastic) employed to

contain, handle, protect, and/or transport an article. Before we proceed, the

subject matter we are considering at hand worth answering the question……

Why do we package products in the first place?.

A simple answer to this question could be……….To protect the product, to

increase the shelf life and to ensure the integrity of the product contained

within……………….. are all important considerations.

Just look at the picture below:

Figure 1.1

A study of the evolution of packaging is inextricably linked to the evolution of

consumption habits, in particular, and of society as a whole. "Tell me how you

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pack your products, and I’ll tell you who you are..."

In the rural society which prevailed until the industrial revolution of the 19th

century, packaging was as rudimentary as the living conditions of the time.

Packaging was often standardised and could be used for a number of

different purposes: transporting food, wood or tools. We are talking more

about receptacles than about packaging, a role they did not fulfil with much

success. The role of packaging was just to ensure the conservation and

transportation of products. There were considerable losses of resources. The

individual was not a consumer but a user of resources that were essential for

survival.

The industrial revolution gave a considerable impetus to the need for

packaging. Mass production and developments in modes of transport created

new needs. We moved from a society where trade was limited and each

community produced goods it needed to a society where activities became

more and more specialised. Products were no longer used by their producer

or his or her immediate neighbours, but were now transported, sold and

consumed. New manufacturing procedures and transport conditions

determined the forms that packaging should take. That is how barrels evolved

especially adapted for sea transportation, as well as boxes that were easy to

move and store. The packaging of products had the principal aims of

protecting them and facilitating their transport, making them available to more

people. Retailers would then simply unpack products before selling them.

Individual packaging was not yet used and no real thought had been given to

packaging as a means of communication or as a sales tool. Products were

packaged and then sold in bulk. Shopkeepers handled the products, weighing

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them and wrapping them individually, with little concern for hygiene, while

their customers watched carefully to make sure they were getting what they

asked for. Modern society as we know it was still in an embryonic stage.

The second packaging revolution came after the Second World War, parallel

to the development of the post-war economy. After having been used to serve

the needs principally of the product (protection) and then the producer

(transportation), packaging began to focus on the needs of the consumer.

Distribution systems were in the process of changing radically, from open

markets and small local grocery stores to supermarkets. From then on,

packaging was used for each individual product, so that it was ready to be

picked up from the shelf and taken away by the consumer. The era of self-

service had begun thanks to packaging of pre-packed products. Products

were pre-packed. Another consequence of this new method of consumption

was that information about the product could be printed on the packaging.

After all, the shopkeeper was no longer able to convey the necessary

information in a large supermarket.

Consumption rose considerably, as did the population. This was the age of

the baby boom, which was twinned by a consumption boom, packaging being

the pre-condition for the modern retail trade.

Packaged products soon became a much-desired commodity and packaging

had to adapt to the latest trends. It is no coincidence that the mass

introduction of plastic packaging dates from this era. Packaging was to

emerge as an industry, and was automated to keep up with the accelerating

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pace of developments. Demands for quality began to rise, thus making ever

greater demands on state-of-the-art technologies. The increasing importance

placed on the individual and the increase of working women made it once

again necessary for packaging to find a means of surpassing itself.

Consumption became mobile, people were on the move and time was

precious. Packaging faced up to this new challenge by means of vacuum-

packed food, using materials that could withstand the impact of being taken

out of the deep-freezer to be popped into a microwave.

As if this growing complexity was not enough, consumption also became

more global. Products made on the other side of the world had to be able to

arrive in our shops in perfect condition. Packaging had to be made even more

resistant, protective, and easily transportable.

The (provisional) end of this story is evident in our shops and daily lives. Our

supermarkets are able to offer ever more exotic products, our household

appliances have sometimes travelled many kilometres before reaching our

homes, and our fridges are filled with convenience foods. The world is

becoming a truly global village.

Packaging has played a key role in this.

1.2 STATEMENT OF THE PROBLEM

This research project is going to attempt to give answer to the following questions:

a. Will it provide a barrier against dirt and other contaminants thus keeping the

product clean?

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b. Will it prevent losses?. For example, packages should be securely closed to

prevent leakage

c. Will it protect the content against physical and chemical damage? For example

the harmful effects of air, light, insects, and rodents. Each product will have its

own needs

d. Will the package and design provide protection and convenience in handling

and transportation during distribution and marketing?

e. Will it help the customers to identify the item and instruct them on how to use it

correctly

f. Will it persuade the consumer to purchase the item?.

1.3 THE OBJECTIVE OF THE STUDY

The main objective of the study is to determine the role of packaging as a

marketing strategy. The subsidiary objective includes:

1. To determine the Physical protection and design. If proper packaging and

design can protects the item or objects in the package from potential damage

that could be caused by automated handling devices, physical force, airborne

contamination, rain, pressure, sunlight, heat, and cold.

2. Agglomeration. If small objects can be packed together in one package for

efficiency. For example, 1,000 pencils packaged in one box require less

handling than 1,000 pencils packaged individually. However, bulk amounts (of

salt, for example), may be better divided into packages of a size suitable for

individual households.

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3. Information transmission. To show that packaging can contain information on

how to use, transport, or dispose of the contents. For example,

pharmaceutical products are required by governmental regulations to have

this information on packaging.

4. Marketing. To prove that custom printed packaging and labels may be used to

advertise a company’s products or services.

5. Reduction of theft. To prove that packaging may be larger than it needs to be

in order to discourage theft by making it more difficult. A software package, for

example, may contain only one disk yet be large enough to hold dozens.

1.4 HYPOTHESIS

A hypothesis is a conjectural or tentative statement of the relationship

between two or more variables (Agbadudu).

In this research project, two hypotheses are to be tested as follows; that the

proportion of respondents that said yes is 90% when asked.

(1) If packaging and design is a marketing strategy in their industry.

(2) If the products in their industry is well designed, labelled and packaged.

1.5 SIGNIFICANCE OF THE STUDY

This study is significant because it will produce data on the role of packaging

as a marketing strategy that will be useful to:

1. Members of the board or councils of the firm

2. The owner of the firm

3. Those at the helm of the organisation, which include high level

managers, and low level managers in the industry

4. Supervisors who carry out the actual marketing functions.

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5. The financial managers, accountants, auditors and marketers who

carry out marketing promotion and distribution.

6. The junior staff and

7. The pubic at large and customers of the marketing firm.

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CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 CONCEPTS OF PACKAGING

2.1.1 Reasons for development of packaging.

a. To protect a product from damage or contamination by micro-organisms and

air, moisture and toxins.

The product must be protected against being dropped, crushed, and the

vibration it suffers during transport. Delicate products such as fruits need to be

protected by a rigid package such as a laminated container.

The product must also be protected against the climate including high

temperatures, humidity, light and gases in the air. It must also be protected

against micro-organisms, chemicals, soil and insects.

b. To keep the product together, to contain it (i.e. So that it does not spill).

Some shapes cannot be easily packaged, for example, certain vegetables.

However, there are methods of getting around this problem. Suppliers of

canned vegetables such as carrots have developed a particular type of plant

that yields carrots that are straight and smaller than the normal variety. These

fit into cans. Some products such as fruit juices and sausages need to be

contained in packages that hold them together and are sealed to prevent

spillage and loss.

c. To identify the product.

Packaging is the main way products are advertised and identified. To the

manufacturer the package clearly identifies the product inside and it is usually

the package that the customer recognises when shopping. Advertising is very

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important when a manufacturer launches a new or existing product. The

package, through its colour scheme or logo, is what is normally identified by

the customer. The package will also contain important information including

ingredients and ‘sell by date’.

d. Protection during Transport and Ease of Transport.

A package should be designed to make it easy to transport, move and lift. A

regular shaped package (such as a cuboid) can be stacked without too much

space between each package being wasted. This means that more packages

can be transported in a container of a lorry. Unusually shaped packages can

lead to space being wasted and this can be costly if thousands of the same

package are been transported.

e. Stacking and Storage.

In supermarkets and shops it must be possible to stack packages so that

space is not wasted on the shelves. Lost space on shelves is looked up on a

lost opportunity to sell to a customer. Also, the package must be designed in

such a way that all the important information can be seen by a potential buyer,

especially the product name. The next time you visit the supermarket look

carefully at the shape of the packages. They are usually the same rectangular

/ cuboid shape. It is the selection of colours and shades that determine

whether the product inside is regarded as a quality, sophisticated or cheap

item. Often packages are stacked on top and alongside each other to reduce

wasted space. The shape and form of the package determines how efficiently

they can be stacked or stored.

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2.1.2 FUNCTIONS OF PACKAGING

Packaging should provide the correct environmental conditions for item

packed starting from the time the item is packed through to its consumption. A

good package should therefore perform the following functions

a. Protective function

The protective function of packaging essentially involves protecting the

contents from the environment and vice versa. The inward protective function

is intended to ensure full retention of the utility value of the packaged goods.

The packaging is thus intended to protect the goods from loss, damage and

theft.

In addition, packaging must also reliably be able to withstand the many

different static and dynamic forces to which it is subjected during transport,

handling and storage operations. The goods frequently also require protection

from climatic conditions, such as temperature, humidity, precipitation and

solar radiation, which may require "inward packaging measures" in addition to

any "outward packaging measures".

The outward protection provided by the packaging must prevent any

environmental degradation by the goods. This requirement is of particular

significance in the transport of hazardous materials, with protection of humans

being of primary importance. The packaging must furthermore as far as

possible prevent any contamination, damage or other negative impact upon

the environment and other goods.

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The inward and outward protective function primarily places demands upon

the strength, resistance and leak-proof properties of transport packaging.

b. Storage function

The packaging materials and packaging containers required for producing

packages must be stored in many different locations both before packaging of

the goods and once the package contents have been used. Packaging must

thus also fulfill a storage function.

c. Loading and transport function

Convenient goods handling entails designing transport packaging in such a

manner that it may be held, lifted, moved, set down and stowed easily,

efficiently and safely. Packaging thus has a crucial impact on the efficiency of

transport, handling and storage of goods. Packaging should therefore be

designed to be easily handled and to permit space-saving storage and

stowage. The shape and strength of packages should be such that they may

not only be stowed side by side leaving virtually no voids but may also be

stowed safely one above the other.

The most efficient method of handling general cargo is to make up cargo

units. Packaging should thus always facilitate the formation of cargo units;

package dimensions and the masses to be accommodated should where

possible be tailored to the dimensions and load-carrying capacity of standard

pallets and containers.

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Where handling is to be entirely or partially manual, packages must be easy

to pick up and must be of a suitably low mass. Heavy goods must be

accommodated in packages which are well suited to mechanical handling.

Such items of cargo must be forkliftable and be provided with convenient

load-bearing lifting points for the lifting gear, with the points being specially

marked where necessary (handling marks).

The loading and transport function places requirements upon the external

shape of the package, upon the mass of the goods accommodated inside and

upon the convenient use of packaging aids. The strength of the package

required for stowing goods on top of each other demonstrates the close

relationship between the loading and transport function and the protective

function.

d. Sales function

The purpose of the sales function of a package is to enable or promote the

sales process and to make it more efficient.

e. Promotional function

Promotional material placed on the packaging is intended to attract the

potential purchaser's attention and to have a positive impact upon the

purchasing decision. Promotional material on packaging plays a particularly

important role on sales packaging as it is directly addressed to the consumer.

This function is of subordinate significance in transport packaging. While

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product awareness is indeed generated along the transport chain, excessive

promotion also increases the risk of theft.

f. Service function

The various items of information printed on packaging provide the consumer

with details about the contents and use of the particular product. Examples

are the nutritional details on yogurt pots or dosage information on medicines.

The package may also perform a further function once the contents have

been used (e.g. storage container, toy).

g. Guarantee function

By supplying an undamaged and unblemished package, the manufacturer

guarantees that the details on the packaging correspond to the contents. The

packaging is therefore the basis for branded goods, consumer protection and

product liability. There are legislative requirements which demand that goods

be clearly marked with details indicating their nature, composition, weight,

quantity and storage life.

h. Additional function

The additional function in particular relates to the extent to which the

packaging materials or packaging containers may be reused once the

package contents have been used. The most significant example is the

recycling of paper, paperboard and cardboard packaging as waste paper.

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2.1.3 THE LEVELS OF PACKAGING

Levels of packaging differ mostly in the quantity of their contents and the

importance of their communication function:

Primary or sales packaging. This reaches the consumer. It has the smallest

product quantity, and communication is very important. The packaging is in

direct contact with the product. It may include such elements as: bottle, cap,

label, printed box, enclosed leaflet.

Secondary or grouped or unit packaging. It is primarily used to safely

transport several primary packages. The most common example is the

corrugated paperboard case (box). It is generally plain and has little

communication function beyond a bar-code to identify it. Secondary

containers also used to display primary packages at the point of sale may

have further communication elements inside. The package proportions should

allow it to be stacked on to a pallet or similar tertiary package with least waste

space and least packaging materials. This requirement may affect the size

and shape of the primary package.

Tertiary or transport packaging. Used for the safe handling and transport of

secondary packages, e.g. shrink-wrapped pallets; metal shipping containers.

Contain the largest product quantities and have little communication function.

Packaging may also be defined by destination:

consumer packs - intended for sale at a retail outlet

industrial packs - usually for delivering goods or materials from one

manufacturer to another; may also be called a bulk pack. Containment and

protection/preservation are the most important functions.

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2.1.4 Packaging environments

There are three environments:

The physical environment: where physical damage can occur to the product.

This includes being dropped or crushed, vibration, and changes in

atmospheric pressure from changes in altitude, all most likely during

distribution.

The ambient or atmospheric environment surrounding the package and its

product. The product may be susceptible to damage from microorganisms,

changes of temperature and humidity, oxygen and carbon dioxide levels, light

(especially UV), odours, dust and dirt, small animals (insects, mice, rats),

water, and contaminants such as exhaust fumes and spillage from adjacent

packages. The product may also affect its environment within the package,

which would influence packaging requirements.

The human environment: where the package interacts with people. They need

to communicate, with messages consistent with the cultures of the people

using them and easy to read. Information may be required by legislation and

by regulation. Packages should be convenient to open and use, in weights

and shapes appropriate to the strength of likely users.

2.2 THE SCENERIO OF PACKAGING

The main aims of packaging are to keep the food in good condition until it is

sold and consumed, and to encourage customers to purchase the product.

Correct packaging is essential to achieve both these objectives. The

importance of packaging can be summarized as follows.

If adequately packaged, the shelf-life of local surpluses of food may be

extended, and this allows the food to be distributed to other areas. In doing

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so, consumers are given more choice in terms of food available, food

resources can be more equitably distributed, and rural producers may be able

to generate income from surplus produce.

Correct packaging prevents any wastage (such as leakage or deterioration)

which may occur during transportation and distribution.

Good packaging and design encourages consumers to buy products.

Solutions to packaging problems differ from region to region. Variations are

the result of factors such as economics, the availability or access to

packaging materials, infrastructure, distribution systems, climatic conditions

and consumer habits. In many parts of the world, foods are wrapped in re-

used newsprint, animal skins, rushes, or reeds. These materials are normally

used for foods which are consumed soon after purchase (e.g. snack foods

and bakery goods) and which therefore need little protection, or for foods such

as flour and sugar which are likely to be transferred into storage vessels in the

home.

Foods with a longer expected shelf-life have different needs and may require

more sophisticated packaging to protect them against air, light, moisture, and

bacteria.

2.2.1 Constraints on adequate packaging

Inadequate packaging may be the result of:

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a lack of knowledge of the materials and/or the requirements for packaging

different foods. Each product has its own characteristics and packaging

requirements vary

in many countries the choice of packaging materials may be limited. For

those that are available, supplies are often situated in urban areas and this

may cause problems for the rural producer in terms of transportation and

often in negotiating with suppliers

packaging can represent a large part of the total cost of a processed food.

This may be in part the result of the higher unit cost when small quantities are

ordered for small-scale production.

2.2.2 Packaging materials

In many developing countries the most commonly used packaging materials

include:

leaves

vegetable fibres

wood

papers, newsprint

earthenware

glass

plastics

metals

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2.2.3 EFFECT OF PACKAGING AND DESIGN ON PRODUCT

If a customer knows what he or she is looking for, and enters your store or visits your

website knowing you have it, you will most likely make a sale. For the other hundred

or so people you hope will purchase your product, this is not the case. For example,

if customers are looking for a digital camera online, they won't spend much time

seeking a reputable online store. The store that is able to effectively present its

products will almost always make the sale. This is because customers trust quality

packaging and design more than they trust low prices.

Companies that sell products in a traditional store already make use of sophisticated

packaging techniques: packaging and design is their interface with their customers.

Websites often neglect this and continue to package their products in the same

manner, rather than spending money on campaigns. The way your product is

packaged can have a huge impact on your customers. In a store, this includes the

shape, size and color of the packaging and any text that is included on the box.

Your entire website becomes your online store, from your initial home page right

down to your order form. If a customer does not like a single element of your page,

chances are he or she will buy the product elsewhere. Customers are attracted to

various different packaging variations. Consequently, knowing the psychological

effects of packaging on your market can greatly enhance your sales. Some markets

respond better to certain colors. Larger packaging usually sells better than smaller

packaging, depending on the price. Silver and metal tones are incredibly effective

when selling technology products.

Color is, of course, the most important factor in product packaging and design. A doll

for girls will obviously sell better in a pink box than a green one. In the 80s, green

was simply not used in snack food packaging until Snackwells decided to incorporate

it into their packaging. Their healthy products became an instant marketing success.

Customers are attracted to both the new and the familiar. People will normally

continue to purchase the same brand of laundry detergent their entire life. The

packaging of their brand is so familiar and comforting to them among the other multi-

colored products that they fail to notice any other brands.

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CHAPTER THREE

SUMMARY AND CONCLUSION

3.1 SUMMARY

If you sell your product through retail distribution channels, the appearance of that

product on the shelf is critical to its sales success. A great package with nice design

helps you sell your product to retailers and customers alike; conversely, a poor

package and dull design can keep your product from reaching its full sales potential.

To help you create a package that works its hardest to sell the product inside, here

are nine tried-and-true steps. Step 1: Select a Name That Helps You Sell. Step 2:

Design for Key Channel Partners. Step 3: Evaluate the Competition. Step 4: Set

Strategic Packaging Objectives. Step 5: Select Creative and Collaborative

Designers. Step 6: Aim for Maximum Shelf Impact. Step 7: Manage the Design

Process. Step 8: View Proposed Designs in Stores. Step 9: Allocate the Time and

Money to Do It Right

3.2 CONCLUSION

Packaging materials such as glass are often made in developing countries but

materials such as plastic film are more commonly imported from multinational

packaging manufacturers. Most multinationals have a retail agent situated in

developing countries and contact addresses can be found in local business

directories.

Further information regarding suppliers and local costs of materials can be obtained

from local packaging institutes; again these can be located through business

directories.

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REFERENCES

Agunlejika. G. (1990). Auditors and Section 359 (2) of Companies and Allied Matters Decree 1990

The Nigerian Accountant, volume xxiii, number 4. p. 51

Alabi S. A. A. (1990) Auditing and Appraisal of oil and gas reserves. Paper presented in the institute of chartered accountants of Nig. Silver jubilee. Seminar on accounting in the oil industry, November 8 and 9. pp. 1-10

American institute of certified public accountants 1981. statement on auditing standard No. 39 Audit Sampling. American institute of certified public accountant. New York

American institute of certified public accountants (1983)

Statement on auditing standards no.47: risk and materiality in conducting an audit. American institute of certified public accountants. New York

http://www.fao.org/Wairdocs/X5434E/x5434e0g.htm

http://www.tis-gdv.de/tis_e/verpack/funktion/funktion.htm

Creating Packaging That Sells By Valorie Cook CarpenterMarket Savvy Consulting Group

http://www.MarketSavvyConsulting.com.

The European Organisation for Packaging and the Environment: Packaging - as it

keeps step with our changing lifestyles

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