1. .

ROLE OF PACKAGING IN FMCG PRODUCTS The importance of packaging

design as a vehicle for communication and branding is growing in competitive
markets for packaged FMCG products. This research utilized a focus group
methodology to understand consumer behavior toward such products. The challenge
for researchers is to integrate packaging into an effective purchasing decision model,
by understanding Consumer‘s behavior towards the packaging of FMCG products.
Packages also deliver brand identification and label information like usage
instructions, contents, list of ingredients or raw materials, warnings for use and
directives for care of product. “Packaging is the container for a product -
encompassing the physical appearance of the container and including the design,
color, shape, labeling and materials used” Packaging has a huge role to play in the
positioning of products. Package design shapes consumer perceptions and can be
the determining factor in point-of- purchase decisions which characterize the majority
of shopping occasions. In recent years the marketing environment has become
increasingly complex and competitive. A product‘s 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. Fast Moving Consumer Goods (FMCG), also
known as Consumer Packaged Goods (CPG), are products that are sold quickly at
relatively low cost. Though the absolute profit made on FMCG products is relatively
small, they generally sell in large quantities, so the cumulative profit on such
products can be large. 32

2. 41. The Relevance of Packaging as a Marketing Tool: Never underestimate the

importance of packaging. 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. 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, 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. Winning at the First
and Second Moment of Truth: Packaging‘s dual role is what makes it a truly unique
marketing tool. The packaging has to provide consumers with the right cues and
clues - both at the point of purchase and during usage. 1. The first moment of truth is
about obtaining customers attention and communicating the benefits of the offer. 2.
The second moment of truth is about providing the tools the customer needs to
experience the benefits when using the product.
3. 42. 34
4. 43. 1. 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. a. Cutting through the clutter -
actually getting the consumer to notice/see the product b. Communicating marketing
information c. Stimulating or creating brand impressions d. Providing various brand
cues :  Value  Quality  Safety 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. 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. To generate initial consideration, two
things are key :- i. Shelf placement - ensuring that your product is placed on the shelf
in the area most likely to be seen by customers. ii. Packaging that creates a visual
contrast 35
5. 44. 2. 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. After purchase, packaging
plays both a functional and a marketing role. i. 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. 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. ii. 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. Although a non-favorable
advertisement might be quickly forgotten, poor packaging provides a continual
reminder of the brand‘s perceived failing. Likewise, favorable packaging can be a
means of continually reinforcing the brand‘s appeal. 36
6. 45. 10. FACTORS INFLUENCING PACKAGING DECISIONS Packaging decisions
are important for several reasons including: 1. Protection : Packaging is used to
protect the product from damage during shipping and handling, and to lessen
spoilage if the product is exposed to air or other elements. 2. Visibility : Packaging
design is used to capture customer’s attention as they are shopping or glancing
through a catalog or website. This is particularly important for customers who are not
familiar with the product. Packaging designs that standout are more likely to be
remembered on future shopping trips. 3. Added Value : Packaging design and
structure can add value to a product. For instance, benefits can be obtained from
package structures that make the product easier to use while stylistic designs can
make the product more attractive to display in the customer‘s home. 4. Distributor
Acceptance : Packaging decisions must not only be accepted by the final customer,
they may also have to be accepted by distributors who sell the product for the
supplier. A retailer may not accept packages unless they conform to requirements
they have for storing products on their shelves. 5. Cost : Packaging can represent a
significant portion of a product‘s selling price. Developing new packaging can be
extremely expensive. Smart packaging decisions can help reduce costs and possibly
lead to higher profits. 6. Long Term Decision: When companies create a new
package it is most often with the intention of having the design for an extended
period of time. Changing a product‘s packaging frequently can have negative effects
since customers may be confused if the design is altered. 7. Environmental or Legal
Issues: Packaging decisions must also include an assessment of its environmental
impact. Packages that are not easily bio-degradable could draw customer and
possibly governmental concern. Also, caution must be exercised in order to create
 packages that do not infringe on intellectual property, such as copyrights, trademarks
or patents, held by others.
7. 46. 37
8. 47. 11. PACKAGING EXPENDITURE Packaging is often criticized on the grounds of
cost and of being a waster of natural resources and energy. The food packaging
industry has always been anxious to conserve resources due to economic
pressures. This has been achieved by using less packaging material, or by turning to
cheaper, more abundant materials. In addition, recycling and package reuse/refilling
schemes have been introduced voluntarily to save materials and energy and to
protect the environment. Prices of packaging materials such as aluminum foil, Kraft
paper, and adhesives for corrugated boxes and packaging plastics have increased
up to 25% forcing companies such as Marico and Dabur to talk price hike in a
marketplace where increasing prices and cutting advertising spends could prove
fatal. FMCG companies, working with extremely low margins after absorbing most of
last year‘s rise in raw material prices and higher logistics costs due to fuel price hike,
are also exploring innovation in packaging and hedging materials to retain
profitability. Packaging costs typically account of 8-10% of the total costs in a FMCG
company.Increase in packaging costs has put pressure on FMCG companies which
are already working with low margins. Prices of packaging materials such as Kraft
paper, adhesives for corrugated boxes, aluminum foil and packaging plastics have
increasedThis has put pressure on companies to either increase the price of
processed food and some other products or to absorb the cost which would affect
their margins. 38
9. 48. 12. PACKAGING AS A MEDIUM TO INCREASE SALES “Catching consumer’s
attention is the first step in making the sale” Packaging plays an important role as a
medium in the marketing mix, in promotion campaigns, as a pricing criterion, in
defining the character of new products, as a setter of trends and as an instrument to
create brand identity and shelf impact in all product groups. The top ten requests
about packaging :- Good starting points for improvements, changes, innovations
which optimize the features of packaging that determine buying decisions and thus
generate new market potential can be summarized in consumer's top ten requests
about product packaging : 1. Eye-catching appearance :- A distinctive, unmistakable
and eye-catching appearance is a signal at the POS to which all consumers and
particularly the younger ones respond positively. Whatever stands out clearly in the
monotonous competitive environment, whatever is surprising scores points with the
consumer. 2. Design, shape and color :- The purpose of well-considered design,
creative printing and finishing is to entice the consumer to devote attention to the
pack and its contents at the POS. Aesthetics and attractiveness are major distinctive
features and are in fact essential in some product segments, beautiful packaging
design is of central importance Consumers like to buy agreeably designed and
decorative products. 3. Functionality :- Functional aspects are the basis for all
successful packaging and for thus greater product success too. Product and aroma
protection, hygiene and tightness, environmental responsibility and practical handling
in both use and storage are important here
10. 49. 39 4. Innovation :- Novelty has exceptionally strong appeal. An innovative pack
can even make "new products" out of familiar ones. Unusual solutions, functional
new developments and originality not only set design trends but also boost sales.
Material :- What is printed on board is read particularly willingly, while what is
 packaged in board sells particularly well. Sustainability, easy disposal and, great
design variety are particular features of the material. 6. Efficient communication :-
The packaging is the credible medium at the point of sale and is consulted willingly
and intensively. This makes it an efficient means of communication. If several of his
senses are appealed to as well, he can be persuaded particularly successfully. 7.
Multisensory appeal :- Anyone who approaches consumers via several of his senses
attracts greater attention, intensifies perception and stimulates interest in buying.
Packaging that can be felt, smelled and heard as well as looked at wins the
customer's favour. So much so that he is willing to pay a higher price for this
multisensory appeal. 8. Appropriateness :- For the product Packaging is considered
to be an important indicator of quality. The quality of the product therefore has to be
communicated by good packaging and not just by promises of quality made in the
text on the packaging. A credible "overall work of art" is created as a result, in which
the contents and the packaging are coherent and the consumer is convinced by their
consistency. 9. Value Packaging :- It is an excellent way to communicate
sophistication, class and value. This makes it an ideal strategic option for expressing
premium positioning as well as being the instrument of choice when a product needs
to be upgraded or a brand needs to be revitalized. Products in classy packaging are
particularly popular presents too. 10. Additional benefits :- Successful packaging not
only combines what is pleasant with what is functionally useful but also provides
additional benefits. For example, as a gift or for presentation, with entertaining
components or simply by making it possible to continue using the
11. 50. 40 Increase Sales with Functional Packaging: The next time you buy a product,
consider the work that goes into its packaging. There are several aspects that make
up the packaging, but often consumers do not realize the amount of thought that
goes into the design, manufacture, and role it plays in marketing. Prior to the advent
of the modern supermarket and department store, manufacturers shipped
merchandise in bulk containers such as barrels, sacks, and tubs. Retail merchants
repacked the contents into smaller, more convenient packs to meet customer needs.
With the growth of mass merchandising and self-service, manufacturers realized the
value of packaging as a marketing tool. Today, it is a vital part of a firm's product-
development strategy; a package may even be an integral part of product itself, for
instance, the aerosol spray can for insecticide. The Changing Role of Packaging:
Product packaging has evolved in its role in marketing strategy. For many years,
packaging received little, if any consideration as part of the product. It merely
provided a storage function. Then, when marketers understood that brand
associations related to packaging are held by consumers. Thus, packaging became
part of brand building efforts, with notable examples being Coke's contour bottle.
Today, packaging takes on an even more prominent role and can actually be a point
of differentiation. Packaging can enable product use in different situations product
easier to use (e.g. Heinz ketchup in bottles designed for refrigerator doors), or shape
a brand image that can command a price premium.
12. 51. 41
13. 52. The Importance of Packaging: Packaging is a very important marketing strategy
to glamorize your product in order to attract the consumer‘s attention. Sometimes
packaging is so important that it cost more than the product itself in order to lure the
consumers to buy it. Packaging should definitely be included in the 4 major P‘s of
marketing. Most consumers judge a product by its packaging before buying. So it is
logical to say attractive packaging is crucial in order to get the first time buyers to buy
your products. Without attractive packaging, who would buy it in order to try it? Your
first step to enter the market is crushed if the packaging is ugly. Converting first time
buyers into loyal customers should be the main goal of your business and packaging
is the door to it. Role of packaging on consumer buying behavior: I have no doubt
whatsoever that packaging influences consumer behaviour. The question, however,
asks whether the degree to which packaging influences consumer behaviour is
significant. This makes for a more interesting debate. If we consider packaging as a
communications medium, which we surely must as companies spend as much
money developing innovative new packaging solutions as they do on many other
elements of the marketing mix, in order for it to be successful it must deliver on both
a functional and an emotional level. Content without creativity is just plain boring, but
creativity in the absence of content is simply noise. Given the choice of two options,
one with an easy-to-open, re-sealable container, the other that takes 10 minutes and
a tool box to extract the product, I know which one I'd go with. On a simpler level, the
physical state of packaging influences our buying behavior. If we are looking to
purchase an unfamiliar product, packaging can play an important role - what
information does the packaging contain, in what language? A lack of familiarity with a
product leads to an increased level of risk associated with the purchase - clearly
labeled contents with an image of the contents can help offset the risk.