Packaging, Labeling, Warranties, and Guarantees

Packaging, Labeling, Warranties, and Guarantees:-

Some product packages—such as the Coke bottle and Red Bull can—are world famous. Many marketers have called packaging a fifth P, along with price, product, place, and promotion. Most, however, treat packaging and labeling as an element of product strategy. Warranties and guarantees can also be an important part of the product strategy and often appear on the package. Packaging Packaging includes all the activities of designing and producing the container for a product. Packages might have up to three layers. Cool Water cologne comes in a bottle (primary package) in a cardboard box (secondary package) in a corrugated box (shipping package) containing six dozen bottles in cardboard boxes. The package is the buyer’s first encounter with the product. A good package draws the consumer in and encourages product choice. In effect, they can act as “five-second commercials” for the product. Packaging also affects consumers’ later product experiences when they go to open the package and use the product at home. Some packages can even be attractively displayed at home. Distinctive packaging like that for Kiwi shoe polish, Altoids mints, and Absolut vodka is an important part of a brand’s equity. Various factors contribute to the growing use of packaging as a marketing tool: • Self-service. An increasing number of products are sold on a self-serve basis. In an average supermarket, which may stock 15,000 items, the typical shopper passes some 300 products per minute. Given that 50 percent to 70 percent of all purchases are made in the store, the effective package must perform many sales tasks: attract attention, describe the product’s features, create consumer confidence, and make a favorable overall impression. • Consumer affluence. Rising affluence means consumers are willing to pay a little more for the convenience, appearance, dependability, and prestige of better packages. • Company and brand image. Packages contribute to instant recognition of the company or brand. In the store, they can create a billboard effect, such as Garnier Fructis with its bright green packaging in the hair care aisle. • Innovation opportunity. Unique or innovative packaging such as resealable spouts can bring big benefits to consumers and profits to producers.

SETTING PRODUCT STRATEGY:-

Packaging must achieve a number of objectives:

1. Identify the brand.

2. Convey descriptive and persuasive information.

3. Facilitate product transportation and protection.

4. Assist at-home storage.

5. Aid product consumption. To achieve these objectives and satisfy consumers’ desires, marketers must choose the aesthetic and functional components of packaging correctly. Aesthetic considerations relate to a package’s size and shape, material, color, text, and graphics. There are a number of factors and criteria in each area. Color is a particularly important aspect of packaging and carries different meanings in different cultures and market segments.

Labeling:-

The label can be a simple attached tag or an elaborately designed graphic that is part of the package. It might carry a great deal of information, or only the brand name. Even if the seller prefers a simple label, the law may require more. label performs several functions. First, it identifies the product or brand—for instance, the name Sunkist stamped on oranges. It might also grade the product; canned peaches are grade-labeled A, B, and C. The label might describe the product: who made it, where and when, what it contains, how it is to be used, and how to use it safely. Finally, the label might promote the product through attractive graphics. Advanced technology allows 360-degree shrink-wrapped labels to surround containers with bright graphics and accommodate more product information, replacing glued-on paper labels. Labels eventually need freshening up. The label on Ivory soap has been redone at least 18 times since the 1890s, with gradual changes in the size and design of the letters. As Tropicana found out, companies with labels that have become icons need to tread very carefully when initiating a redesign to preserve key branding elements. A long history of legal concerns surrounds labels, as well as packaging. In 1914, the Federal Trade Commission Act held that false, misleading, or deceptive labels or packages constitute unfair Marketers must balance competing demands in their packaging; Sun Chips’ environmentally friendly packaging was cut back shortly after its launch because many consumers complained about how noisy the bags were. Tropicana

SETTING PRODUCT STRATEGY:-

The Fair Packaging and Labeling Act, passed by Congress in 1967, set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed federal agencies to set packaging regulations in specific industries. The Food and Drug Administration (FDA) has required processed-food producers to include nutritional labeling that clearly states the amounts of protein, fat, carbohydrates, and calories contained in products, as well as vitamin and mineral content as a percentage of the recommended daily allowance. The FDA has also taken action against potentially misleading uses of such descriptions as “light,”“high fiber,” and “low fat.”

Warranties and Guarantees:-

All sellers are legally responsible for fulfilling a buyer’s normal or reasonable expectations. Warranties are formal statements of expected product performance by the manufacturer. Products under warranty can be returned to the manufacturer or designated repair center for repair, replacement, or refund. Whether expressed or implied, warranties are legally enforceable. Extended warranties and service contracts can be extremely lucrative for manufacturers and retailers. Analysts estimate that warranty sales have accounted for a large percentage of Best Buy’s operating profits. Despite evidence that extended warranties do not pay off, some consumers value the peace of mind. These warranties still generate multibillion dollars in revenue for electronic goods in the United States, though the total has declined as consumers have become more comfortable seeking solutions to technical problems online or from friends. Many sellers offer either general or specific guarantees. A company such as Procter & Gamble promises general or complete satisfaction without being more specific—”If you are not satisfied for any reason, return for replacement, exchange, or refund.” A. T. Cross guarantees its Cross pens and pencils for life. The customer mails the pen to A. T. Cross (mailers are provided at stores), and the pen is repaired or replaced at no charge. Guarantees reduce the buyer’s perceived risk. They suggest that the product is of high quality and the company and its service performance are dependable. They can be especially helpful when the company or product is not well known or when the product’s quality is superior to that of competitors. Hyundai’s and Kia’s highly successful 10-year or 100,000 mile power train warranty programs were designed in part to assure potential buyers of the quality of the products and the companies’ stability.