abhay fmcg

84
INTRODUCTION STATEMENT OF THE PROBLEM This study will primarily investigate consumer behaviour towards packaging of FMCG products. It is about all those factors that must be considered while designing a package which induces a consumer to buy, also keeping in mind what the consumers will pay for and how it will benefit them; simultaneously keeping a track of the environmental consequences of the packaging material used. Thus, the research is titled “The Role of Packaging in the Sale of FMCG Products.” OBJECTIVES OF THE STUDY The main objectives of this study are: 1. To find out if Packaging influences a consumer to shift from one brand to another 2. To find out which aesthetic factor attracts the consumer towards the purchase of an FMCG product 3. To find out whether the reusability of a package influences a consumer to buy an FMCG product 4. To find out the impact of an 'eco-friendly' package on the consumer 1

Upload: ayush-jain

Post on 13-Apr-2016

65 views

Category:

Documents


0 download

DESCRIPTION

ghgjhgjhg.

TRANSCRIPT

Page 1: Abhay Fmcg

INTRODUCTION

STATEMENT OF THE PROBLEM

This study will primarily investigate consumer behaviour towards packaging of FMCG products.

It is about all those factors that must be considered while designing a package which induces a consumer

to buy, also keeping in mind what the consumers will pay for and how it will benefit them;

simultaneously keeping a track of the environmental consequences of the packaging material used.

Thus, the research is titled “The Role of Packaging in the Sale of FMCG Products.”

OBJECTIVES OF THE STUDYThe main objectives of this study are:

1. To find out if Packaging influences a consumer to shift from one brand to another

2. To find out which aesthetic factor attracts the consumer towards the purchase of an FMCG

product

3. To find out whether the reusability of a package influences a consumer to buy an FMCG product

4. To find out the impact of an 'eco-friendly' package on the consumer

HYPOTHESIS FOR THE STUDY

1. Packaging does not influence a consumer to shift from one brand to another

2. 'Color, texture and contrast' is not an important aesthetic factor that attracts consumers towards the

purchase of an FMCG product

3. Paper is the most preferred packaging material in the 21st century

4. Consumers will prefer innovative packaging each time in case of preserved products

5. Consumers are not willing to pay more for eco-friendly products

1

Page 2: Abhay Fmcg

RESEARCH METHODOLOGY: METHODS AND TOOLS

RESEARCH METHODS

Primary as well as Secondary research was employed in this project.

Primary research is the first hand research that the researcher collects, by interacting with the sample

population and the conclusions and analysis he/she draws from the data that has been obtained.

Primary research in this project involved interacting with 61 consumers to know, understand and

comprehend the influence of packaging on their buying behaviour and their individual views on eco-

friendly packaging.

Secondary research is the background research done by the researcher on already existing information

regarding the topic.

This helps the researcher in determining whether previous research papers have been written on that

particular topic and if and how new ground on that particular topic can be covered. It also helps the

researcher in building a base for the questions to be asked to the sample population and to construct an

informative questionnaire and ask all the right questions.

Secondary research in this project involved reading and examining various research papers, journals and

books written on or related to ‘The Role of Packaging on the Sale of FMCG Products’.

DATA COLLECTION METHODS

Quantitative Data: Surveys

This method captures information through the input of responses to a research instrument containing

questions (such as a Questionnaire). Information can be input either by the respondents themselves (E.g.:

An Online Survey) or, the researcher can input the data (E.g.: a phone survey, a one-on-one survey, a mall

intercept, etc).

The main methods for distributing surveys are via a website, postal mail, phone, or in person. However,

newer technologies are creating additional delivery options including through wireless devices, such as

2

Page 3: Abhay Fmcg

smart phones and technologies wherein the information gets recorded in real time and can be viewed and

intercepted very easily through pie charts and bar graphs.

Surveys for this study were conducted via one-on-one personal interviews with consumers at their

households or workplaces.

Most consumers were forthcoming with their responses and displayed significant interest and

involvement.

Qualitative Data Collection

Qualitative data collection requires researchers to interpret the information gathered, most often without

the benefit of statistical support. If the researcher is well trained in interpreting respondents’ comments

and activities, this form of research can offer very good information. However, it may not hold the same

level of relevancy as quantitative research due to the lack of scientific controls with this data collection

method.

For example, a researcher may want to know more about how customers make purchase decisions. One

way to do this is to sit and talk with customers using one-on-one interviews. However, if the interview

process allows the researcher to vary what questions are asked (i.e., not all respondents are asked the

same questions), then this type of research may lack controls needed to follow a scientific approac

SAMPLING

Survey Started: July 2015

Survey Completed: october 2015

Geographical Area Covered by the Survey: Across Mumbai Suburban and City.

Definition of the Population:

The survey was done for consumers who indulge in the buying process and make purchases for

themselves.

Sample Size : 61 Respondents.

3

Page 4: Abhay Fmcg

LIMITATIONS OF THE STUDY

1. The paucity of time and resources was the major constraint. 

2. The sample size was limited. 

3. The sample was taken from the population residing in Mumbai only. Thus the results are not

applicable to the whole of India. 

4. Non co-operation of some respondents has also affected the research results. 

5. Being an opinion survey, a lot of subjectivity is involved in the study. 

6. The possibility of respondents being biased cannot be ruled out. 

7. The limited knowledge of the respondents regarding the topic may hamper the true conclusion of

the study. 

4

Page 5: Abhay Fmcg

JO DIKHTA HAI WOH HI BIKTA HAI 

The earlier approach to marketing was simple enough: make sure the product is visible - on store

shelves and through mass media advertising - and the product will sell itself. With the evolution of

modern retail, the emphasis is shifting to in-store displays and promotions - probably also because for

the first time, the space for such initiatives is available.

 

But manufacturers no longer have the last word on what will happen at the store. Modern trade has a

significant say in promotions, perhaps because it offers far superior results with a much faster lead

time.

Sunil Sethi from Cadbury India points out that retailer are more open to brand promotions and

displays - including posters, gondolas and danglers - when manufacturers back up their ideas with

shopper insights. "There will be a shift from traditional media to increased communication at the point

of purchase," he says.

 

Initiatives that help grow the category as a whole are particularly welcome, say analysts, since that

boosts the retailers' revenue. And many FMCG companies are predicting that spends on promotion,

in-store and point of purchase displays will increase significantly from the present 20-30 per cent

share of the marketing budget.

 

Consumer goods companies need to make several changes - in strategy and in attitude - if they are to

achieve the same level of success with organized retail as they have with traditional formats. Printing

barcodes on their products would probably be a good place to start.

SHOW YOUR PRODUCTS TO CUSTOMERS

Buyers spend lots of energy in buying and developing the merchandise before it finally hits the stores.

Sometimes, however, it is forgotten that one very critical aspect is the way the product is presented to

customers in the store and overlook issues such as packaging and in-store display.

The importance of the saying “JO DIKTA HAI WOH BIKTA HAI” cannot be overestimated. Proper

display and presentation can make all the difference between achieving and not achieving sales

targets.  

Remember the following:

5

Page 6: Abhay Fmcg

 

1. Visual Merchandising : Be involved in the planning of the in-store presentation of your

merchandise. Adequately plan the MDQ‘s (Minimum Display Quantities).

 

2. Communicating Ideal Presentation Standards : Effectively communicate to the store staff on how

the merchandise should be displayed and the ideal presentation standards. This could be by way of

talking to sales staff directly, sending a mail before the merchandise arrives at the stores or

making a detailed manual at the beginning of each season.

Remember to look for ways in which the job of the sales staff can be made easier by improving

packing and display methods of the product.

Visual Merchandising by Milo

 

6

Page 7: Abhay Fmcg

Success Factors for Visual Merchandising

7

Page 8: Abhay Fmcg

INTRODUCTION TO PACKAGING

MEANING OF PACKAGINGPackaging is the science, art and technology of enclosing or protecting products for distribution,

storage, sale, and use.

Packaging also refers to the process of design, evaluation, and production of packages.

Packaging can be described as a coordinated system of preparing goods for transport, warehousing,

logistics, sale, and end use. Packaging contains, protects, preserves, transports, informs, and sells. In

many countries it is fully integrated into government, business, and institutional, industrial, and

personal use.

 

The wrapping material around a consumer item that serves to contain, identify, describe, protect,

display, promote and otherwise make the product marketable and keep it clean is a package.

Packaging is more than just your product's pretty face. Your package design may affect everything

from breakage rates in shipment to whether stores will be willing to stock it. For example, "display

ability" is an important concern.

DISTRIBUTION-RELATED PACKAGING CONSIDERATIONS:

Labeling : You may be required to include certain information on the label of your product

when it is distributed in specific ways. For example, labels of food products sold in retail

outlets must contain information about their ingredients and nutritional value.

Characteristics of a Good Labeling

8

Page 9: Abhay Fmcg

Opening: If your product is one that will be distributed in such a way that customers will want

to--and should be able to--sample or examine it before buying, your packaging will have to be

easy to open and to close again.

If, on the other hand, your product should not be opened by anyone other than the purchaser--

an over-the-counter medication, for instance--then the packaging will have to be designed to

resist and reveal tampering.

Easy to open Dettol packages

Size: If your product must be shipped a long distance to its distribution point, then bulky or

heavy packaging may add too much to transportation costs.

Different Packaging Sizes of Amul Ice-cream

Durability: Many products endure rough handling between their production point and their

ultimate consumer. If your distribution system can't be relied upon to protect your product,

your packaging will have to do the job.

9

Page 10: Abhay Fmcg

 

HISTORY OF PACKAGINGFrom the very earliest times, humans consumed food where it was found. Families and villages made

or caught what they used. They were also self-sufficient, so there was little need for packaging of

goods, either for storage or transportation. When containers were needed, nature provided gourds,

shells, and leaves. Later, containers were fashioned from natural materials, such as hollowed logs,

woven grasses and animal organs. As ores and chemical compounds were discovered, metals and

pottery were developed, leading to other packaging forms.

Packaging is used for several purposes:

Carries the products and defines the amount the consumer will purchase.

Protects the products from contamination, environmental damage and theft

Facilitate transportation and storing of products.

Provides relevant information and colorful designs that make attractive displays.

Some of the most popular packaging developments are:

Paper and Paper products

Glass

Metals

Plastic

 

10

Page 11: Abhay Fmcg

PACAKGING INDUSTRY

INTRODUCTION

In preindustrial society, packaging of food was far from being unknown. It was used for food storage

at home and for transport from the production place, the farm, or workshop to the local or regional

market.

Examples are the transport of cereals or flour in bags, tea in wooden boxes or tinplate canisters, and

oils in jars. At the household level, people salted meat and pickled vegetables and preserved them in

jars.

In groceries at the end of the nineteenth century, most commodities were still unpacked and sold in

bulk. Products such as tea, coffee, sugar, flour, or dried fruits were weighed out in front of the

customer and wrapped in paper or put into a bag.

In major cities in the 1880s, the milkman came around with a dipper and can to deliver milk, which

was often dirty.

 

ORIGIN OF MODERN PACKAGING AND CANNING 

Early methods of sealing jars included waxed paper, leather, or skin, followed by cork stoppers and

wax sealers. The beginning of modern food technology started with the experiments of the French

confectioner Nicolas Appert (1750–1841).

In 1795, the French government offered a prize of 12,000 francs to anyone who could find a way to

preserve food because Napoleon Bonaparte needed to provide the military with a safe food supply.

(The requirements of providing adequate food supplies for armies and navies have been of great

significance in the history of modern packaging and food preservation.) After fourteen years of

experimentation, Appert developed a method for preserving foods by heating.

 

11

Page 12: Abhay Fmcg

The food, meat, or vegetables, was first cooked in open kettles and placed in glass jars. After

removing as much air as possible, the jars were carefully sealed with corks wired in place and then

submerged in boiling water.

 

Appert chose glass for the container because he believed that it was air that caused the spoilage—

glass is a material least penetrated by air. It is of importance to note that, in Appert's time, it was not

known that micro-organisms caused food to spoil. The processes involved in food spoilage were not

understood until the second half of the nineteenth century.

 

In 1810 Appert published his prize-winning essay on food preservation and the French emperor

Napoleon awarded the 12,000-franc prize to him. Within a year, an English version appeared in

London, and the new method of preserving food in glass spread quickly to other countries.

CANNING:

Two individuals in England are given credit for applying and improving Appert's invention, Bryan

Donkin and Peter Durand.

Bryan Donkin, an associate of John Hall's at his Dartford Iron Works, realized in 1811 that iron

containers could be used instead of the fragile glass, and in 1812 the factory began to produce canned

food such as meat. In 1810, Peter Durand patented the use of metal containers, which were easier to

make and harder to break than glass jars. (The glass jars used by Appert frequently broke.) He

covered iron cans, which were prone to rust, with a thin plating of tin (which is not adversely affected

by water), and invented the "tin can." By 1813, Durand was selling canned meat to the Royal Navy.

The British admiralty bought these foods as part of the medical stores for distribution to sick men as

well as to supply expeditions.

 

By 1819 canning had arrived in the United States, but no one wanted canned food until the Civil War

started. In 1821, the William Underwood Company in Boston introduced commercial canning in the

United States. For a long time, people regarded canned foods with suspicion, and for good reasons.

 

In the middle of the nineteenth century, the foods produced by the canning industry were as likely to

spoil as not because of inadequate heating techniques. Then, beginning in 1868, first in the United

States and later in Europe, handmade cans were replaced by machine-cut types. The new technology

made it possible for giant meat-canning firms to emerge in Chicago and Cincinnati.

12

Page 13: Abhay Fmcg

 The product, however, was packed in big, thick, clumsy red cans and was not very appetizing.

 

The American Gail Borden was a pioneer in food canning. In 1856 he successfully produced

sweetened condensed milk in cans and was granted a patent on the process. With financial support,

the New York Condensed Milk Company was established in 1857. The demand for condensed milk

was at first limited, but during the American Civil War (1861–1865) it was introduced on a large

scale.

The Civil War contributed significantly to the popularization of canned foods in general. The army

had to be fed and the government contracted with firms to supply food. Under difficult circumstances,

people learned that canned foods such as condensed milk can be tasty and nourishing. The invention

of practical can openers at the end of the nineteenth century made cans easier to open, making them

even more convenient for consumers.

 

For many years, however, the flavor of most canned food left much to be desired. On the other hand,

it should be realized that products such as canned peas and salmon were usually sold to people living

on the American prairies or in the urban slums in Great Britain, most of whom had never eaten the

fresh product. In addition, losses due to spoilage caused by microorganisms remained high.

It was not until the end of the nineteenth century that research carried out at Massachusetts Institute of

Technology made a substantial contribution to improving the keeping quality, nutritional value, and

taste of food products preserved in cans and glass.

In the early twentieth century, the heavy cans were replaced by those made of lighter materials, and

manufacturers could stress that their products were hsygienically processed and, therefore, safer to eat

than the traditionally unpackaged products that had been sold in bulk. As food technology advanced,

numerous chemical additives were developed to control or speed up food processing and to increase

the keeping quality of canned foods.

 

Originally, the nutritional value of food preserved by canning was not high, mainly due to the length

of time required by the heating techniques. From the 1920s onward, however, the nutritional value of

canned foods gradually approached that of the fresh product, thanks to modern food technology.

Finally, in the 1960s, Reynolds and Alcoa companies succeeded in making all-aluminum cans out of

one piece of metal, thereby solving the problem of the weight of the cans; only the lid needed to be

attached (Clark, 1977). At the same time, the invention of the rip-off closure and the pop-top lid on

13

Page 14: Abhay Fmcg

aluminum cans made them even more convenient, and made can openers unnecessary. For consumers,

the choice between fresh or canned food became largely a question of taste, convenience, and

preference.

 

OVERVIEW OF THE PACKAGING INDUSTRY – A GLOBAL AS WELL AS

INDIAN PERSPECTIVE 

The annual turnover of Indian packaging industry will touch $ 32 billion by 2025 from the present $

24.6 billion, said Union Minister of State for Commerce and Industry, E M Sudarsana Natchiappan.

"In the world scenario, the total turnover of packaging industry is about $ 550 billion where Indian

share is about $ 24.6 billion per annum.”

 

"The annual growth rate of this sector is about 15 per cent per annum.” Natchiappan said after laying

foundation stone of new educational complex and international packaging centre.

As per the Mckinsey report, there will be ten times increase of middle class population by 2025 in

India which will further trigger the consumption of packaging material and thus, the packaging

industry will grow further, he said, adding that the country needs more packaging professionals.

 

If you look at packaging design in rural India, it’s very compelling as everything is natural. India can

become a technology transfer driven country by rejuvenating the use of agricultural by-products for

packaging. India has the potential to be a world leader in packaging and innovation going forward

 

14

Page 15: Abhay Fmcg

PACKAGING TYPES 

Protecting goods is very important. Food, electronics, clothes, furniture and other consumer goods all

come in packaging meant to protect them during transportation and storage. There are different types

of packaging solutions and materials. Packaging can be standard or custom made, for instance.

Paper and Carton Packaging:

Paper and carton packaging is used for different types of goods (food, electronics, toys, shoes,

kitchenware and even other packaging materials). Paper and carton packaging companies

produce wrapping paper, inflated paper, sheets, boxes, tubes, pallets, interlayer‘s, corners,

edges and custom protective systems (depending on the dimension and shape of the packed

good, the carton is cut and modeled to fix and protect the product). Paper can be used to

laminate other materials in order to make them stronger. There is also anticorrosive paper that

can be used to wrap goods or to laminate other materials.

Paper and Carton Packaging

Film Packaging:

There are multiple types of films used in the packaging industry, most commonly polyethylene

(PE), polypropylene (PP), polyolefin and polyvinyl chloride (PVC) films. The films usually

come on a roll and are used to wrap goods, cover goods, protect boxes and make other

15

Page 16: Abhay Fmcg

packaging products (such as bags, tubes, bubble wrap and sheets). Films can be used for

lamination, printed or perforated. They can be anticorrosive, antistatic, shrinkable or non

shrinkable, and slippery or non slippery.

Film Packaging

Foam Packaging:

Foam used for packaging can be produced on a roll or in sheets of different thicknesses. The

foam is used to wrap goods or make bags, corners, edges and custom systems. The corners and

edges are used to protect flat glass, furniture and sharp edges. Foam can be cut and modeled

on the product's shape to fix and protect it. It can be antistatic and has good insulation

properties.

16

Page 17: Abhay Fmcg

Foam Packaging

Textile Packaging:

There are some goods that are best protected by textiles. For example, there are custom-made

textile insertions used in the automotive industry to protect car parts during transportation. The

textile insert is put on a metal frame that fits into a metal container. There is also textile

material used for box covers.

Plastic Boxes and Containers:

Multiple types of plastic boxes and containers are used in all industries. For example, in the

food industry there are plastic containers for goods like ketchup, yogurt, milk and juices.

17

Page 18: Abhay Fmcg

Plastic boxes are mainly used for transporting goods and are reusable. They can be stacked,

folded when empty to save storage space and recycled.

Plastic Containers

Packaging Systems:

Packaging companies offer different types of systems that can be divided into two categories:

special solutions and packaging machines.

The special solutions are used for valuable products that don't have a regular, simple shape.

For example, parts of airplanes or expensive decorative glass objects need special solutions to

be packed. The goods fit perfectly into the packaging and are protected against damages.

Packaging machines are used for wrapping (wrapping the stretch film on the pallet), strapping

(applying and sealing straps on boxes), sealing (with tape for boxes and with heat for films)

and shrink wrapping (applying PVC or polyolefin film on products or boxes). There are also

machines that inflate film, paper and instant foam.

Other Types:

18

Page 19: Abhay Fmcg

Adhesive tapes are also considered packaging materials, as they help seal boxes. They are

usually made out of PE or PP film that has acrylic or solvent glue applied to it and that can be

printed on. Strapping tapes are usually applied on boxes or pallets. They are made out of PE or

PP and can be printed with one color. The standard colors are black and clear for PP and green

for PE.

 

19

Page 20: Abhay Fmcg

FUNCTIONS OF PACAKGING 

The basic functions of packaging are – to protect, distribute, inform, attract and sell. However, here

you face a special challenge: how to combine beauty and practicality? How to convey the vital

product promise in a superbly aesthetic way and at the same time optimize all those functions

necessary for a profitable business?

The choice of material is crucial: durability, weight, formability, color, texture, touch and feel, costs,

filling line requirements, source reduction and other ecological aspects. In primary packaging, glass

and plastic are the predominant options but not the only ones.

 

In secondary packaging, paperboard carton is the clear winner with superb performance across all

packaging functions.

 

The heart of the matter, however, is not the material but how to use it. There‘s no end to what

innovation can do – better functionality from product protection to user convenience, new designs,

forms and packaging concepts, even totally new business models. Therefore, promoting

innovativeness is the key ingredient in the service palette.

 

Billions of pounds are spent on packaging food and other items each year. Sixty percent of all

packaging is for food products. At the beginning of the 20th century most food was sold loose. It was

weighed and measured out and placed in bags or directly into the shopper‘s bag to carry home.

Packaging and advertising were virtually unknown. Today packaging is a massive, lucrative industry

and often it is the way the packaging looks that persuades the shopper to buy the product inside it.

20

Page 21: Abhay Fmcg

FUNCTIONS 

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. The inward and outward protective function

primarily places demands upon the strength, resistance and leak proof properties of transport

packaging.

21

Page 22: Abhay Fmcg

 

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. It is rightly said that packaging works as silent, salesman. It catches the

attention of customers, who pick up the product, go through its description and are induced to

purchase the product. Self service is becoming more and more common in the field of

shopping, where the customer picks up the product himself and makes its payment on the

counter. Packaging in these circumstances promotes the sales.

 

Promotion 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

product awareness is indeed generated along the transport chain, excessive promotion also

increases the risk of theft.

 

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).

 

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 several legalislative

requirements to be followed in every country with respect to packaging.

22

Page 23: Abhay Fmcg

Highlighted below are the common requirements in India as per The Standards of Weights and

Measures Act, 1976:

The name and address of the manufacturer or where the manufacturer is not the packer.

The name and address of the manufacturer and packer.

The common or generic names of the commodity contained in the package.

The net quantity in terms of the standard unit of weight or measure, of the commodity

contained in the package or where the commodity is packed or sold by number, the

number of commodity contained in the package.

The month and year in which the commodity is manufactured or pre-packed.

The retail price of the package.

23

Page 24: Abhay Fmcg

PACAKGING AND MARKETING

 

Thousands of new products are introduced every year, more than 15,000 to be exact. How can your

product compete, not only with established brands but with the plethora of new products that are

being introduced? The answer of course is THE PACKAGING. The right packaging with the right

message will rise above the competitive landscape.

 

But how many companies understand the value behind packaging as a marketing tool? Most just look

at it as a way to convey the product or recycle tired images and product packaging that doesn't work.

Understanding the complexities of how a package reaches out to a consumer is one of the most

important things to understand. Communicating that message on product packaging is a time

consuming and difficult challenge.

 

The answer derives from understanding what the consumer wants from their product packaging.

 

A good way to assess this problem is to look at yourself and how and where you shop? What compels

you to look at a new product? What drew you to pick it up and take a closer look?

 

Your answer may be different from that of another member of your family or a significant other but

the message is the same. You were intrigued enough by whatever ever that made you pick up the

product and take a closer look. That's half the battle won because your product will never sell if

someone doesn't pick it up in the first place.

 

Here are a few questions to ask yourself about your package. Remember think from the consumers'

perspective not from the manufacturers.

  

Is it new and innovative?

Is it fulfilling a need?

Is it easy to use and convenient?

Is it a good value?

Does it make the consumer happy?

24

Page 25: Abhay Fmcg

Does it inspire consumer trust and loyalty?

Is it safe and secure?

Does it compel you to want to know more?

How does your product stack up in solving a consumer want or need?

Would your package make someone desire to take a closer look?

 

Remember it's the package talking here. It's the one doing the work – marketing what's inside to the

customer. That's what you need to drill in your brain about your package - why buy me?

 

Evaluating or developing product packaging with the consumer in mind is your first step in creating a

package that markets all the products attributes to the ultimate decision maker – the customer.

 

Don't get concerned if your package doesn't do all of the above. It only takes one unique attribute that

will intrigue a consumer to take a closer look. Of course the more needs you can fulfill the better

"connection" to the consumer. The "consumer connection" is what you are trying to create. So think

outside the typical behavior and solve the hidden need that will make a consumer buy your product

and not competitors.

 

Packaging is a complicated intricate process. Understanding it requires time and consideration. It‘s

not just about getting the product there. It‘s also about getting the product to SELL.

Branding and packaging are two of the most important components of marketing. Branding is a term

used to describe the name, description and design of a product. Branding differentiates a company's

product from their competition. Packing is a marketing tool used to reflect the brand. A company uses

packaging to sell the product inside. The colors, fonts, descriptions and logo are designed to drive

consumers to buy the product.

 

Sales:

The entire focus of a marketing department is to strategize methods to sell the company's products.

Branding and packaging are two of the most effective ways to do this. Once a brand has been

determined, methods are employed to sell the product. Advertising, the company website and product

packaging must all present a cohesive brand or image. In successful brand campaigns, customers

recognize the company's product packaging and purchase in part because they identify with the brand.

 

25

Page 26: Abhay Fmcg

Branding:

When a company brands a product, they determine its "personality." Creating a brand that is instantly

recognizable and perceived positively is the ultimate goal. Branding integrates components such as

color, style and visual imagery to distinguish a company's products from the competition. Developing

logos, slogans and tag lines are all ways that marketers communicate a specific brand.

 

Slogans:

One of the most effective methods of branding is the use of slogans. Companies often identify a

specific characteristic that sets their product apart from the competition. The slogan becomes a key

component in all marketing efforts, including packaging. For example, Nike has effectively marketed

both their logo and slogan "Just do it" into an easily recognized brand.

 

Packaging:

Packing is designed to capture a customer's attention and it can directly affect whether they buy the

product or not. Innovation and creativity come into play when it comes to packaging. A well-

marketed product is packaged in a way that compels the customer to pick it up and take a closer look,

at which point product descriptions and graphics must be clear.

 

Packaging Tools:

Colors, fonts, descriptions and logos are the tools that are used in packaging design. Companies

market their brands by creating a specific "look and feel" to their product's packaging. A customer

must feel comfortable enough with the presentation of the company's brand to want to purchase the

product.

 

Company Image:

Branding and packaging are created by a company. While these efforts are used to market products,

they in turn market the company itself. Branding reflects the image that the company seeks to project.

For example, IBM takes on a more conservative, well-established corporate image while Apple

brands itself as a hip and cutting edge company. These images reflect the market that the company has

identified as target customers.

26

Page 27: Abhay Fmcg

IBM Packaging

Apple Packaging

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.

 

A key example of the latter, is a case cited by Hofmeyr and Rice, where a change in pack design

contributed towards a drop in a leading beer brand‘s market share by more than 20% in the space of

just one year. Nothing other than the packaging had changed – the product itself had not changed in

any way. The pack change, although not dramatic (the same style but with lighter coloring) led to a

perception that the beer‘s quality had been compromised and that it was now weaker. This caused

many previously loyal consumers to lose faith in the brand and to move to the brand’s – stronger

competitors instead. This is a clear example of the power of bad packaging. Although a non-favorable

advertisement might be quickly forgotten, poor packaging (if it remains with the brand throughout its

usage cycle) provides a continual reminder of the brand’s perceived failing.

27

Page 28: Abhay Fmcg

Likewise, favorable packaging can be a means of continually reinforcing the brand‘s appeal.

Bear Beer which was Darker in Color

Hogshead Beer which was Lighter in Color

28

Page 29: Abhay Fmcg

WASTE MANAGEMENT OF MATERIALS USED IN PACKAGING 

Package development involves considerations for sustainability, environmental responsibility, and

applicable environmental and recycling regulations. It may involve a lifecycle assessment which

considers the material and energy inputs and outputs to the package, the packaged product (contents),

the packaging process, the logistics system, waste management, etc. It is necessary to know the

relevant regulatory requirements for point of manufacture, sale, and use.

The traditional three R‘s – reduce, reuse, and recycle are part of a waste hierarchy which may be

considered in product and package development.

 

Waste Management Hierarchy

Prevention:

Waste prevention is a primary goal. Packaging should be used only where needed. Proper

packaging can also help prevent waste. Packaging plays an important part in preventing loss or

damage to the packaged-product (contents). Usually, the energy content and material usage of

29

Page 30: Abhay Fmcg

the product being packaged are much greater than that of the package. A vital function of the

package is to protect the product for its intended use: if the product is damaged or degraded,

its entire energy and material content may be lost.

Minimization/Source Reduction:

The mass and volume of packaging (per unit of contents) can be measured and used as one of

the criteria to minimize during the package design process. Usually ―reduced packaging also

helps minimize costs. Packaging engineers continue to work toward reduced packaging.

Reuse:

The reuse of a package or component for other purposes is encouraged. Returnable packaging

has long been useful (and economically viable) for closed loop logistics systems. Inspection,

cleaning, repair are often needed. Some manufacturers re-use the packaging of the incoming

parts for a product, either as packaging for the outgoing product or as part of the product itself.

Recycling:

Recycling is the reprocessing of materials (pre and post consumer) into new products.

Emphasis is focused on recycling the largest primary components of a package: steel,

aluminum, papers, plastics, etc. Small components can be chosen which are not difficult to

separate and do not contaminate recycling operations.

Energy recovery:

Waste-to-energy and refuse-derived fuel in approved facilities are able to make use of the heat

available from the packaging components.

Disposal:

Incineration and placement in a sanitary landfill are needed for some materials. Certain states

within the US regulate packages for toxic contents, which have the potential to contaminate

30

Page 31: Abhay Fmcg

emissions and ash from incineration and leach ate from landfill. Packages should not be

littered.

Development of sustainable packaging is an area of considerable interest by standards

organizations, government, consumers, packagers, and retailers.

Sustainable packaging must meet the functional and economic needs of the present without

compromising the ability of future generations to meet their own needs.

31

Page 32: Abhay Fmcg

OVERVIEW OF FMCG INDUSTRY

The FMCG industry manages consumer packaged goods - production, distribution to marketing. The

Indian FMCG industry is the fourth largest industrial sector that has stayed recession-resilient and

shows signs of bright future.

 

The Fast Moving Consumer Goods (FMCG) industry primarily deals with the production, distribution

and marketing of consumer packaged goods, i.e. those categories of products that are consumed at

regular intervals.

 

Examples include food & beverage, personal care, pharmaceuticals, plastic goods, paper & stationery

and household products etc.

 

The industry is vast and offers a wide range of job opportunities in functions such as sales, supply

chain, finance, marketing, operations, purchasing, human resources, product development and general

management.

FMCG & SMCG Products

India is a consumer driven market, with consumer spending in the country projected to more than

double by 2025. These days, the Indian consumer segment, broadly categorized into urban and rural

markets, is attracting marketers from across the globe.

 

32

Page 33: Abhay Fmcg

Global corporations see India as a key market for the future. The growth in the country's consumer

market is largely driven by a young demographic and rising disposable income. If India sustains its

current pace of growth for the foreseeable future, average household incomes will likely triple over

the next twenty years and the country will become the world's fifth largest consumer economy by

2025, as per a study by the McKinsey Global Institute (MGI).

 

The Government of India has also played a significant role in the growth of the Indian consumer

segment. It has brought about policies which have attracted foreign direct investment (FDI) and

consequently boosted economic growth.

 

Market size

India has the potential to become the world's largest middle class consumer market with an aggregated

consumer spend of nearly US$ 13 trillion by 2030, as per a report by Deloitte titled 'India matters:

Winning in growth markets'.

 

Driven by growing incomes and increasing affordability, the consumer durables market is projected to

expand at a compound annual growth rate (CAGR) of 14.8 per cent, from US$ 7.3 billion in FY12 to

US$ 12.5 billion in FY15.

Online retailing, both direct and via marketplaces, will grow threefold to become a Rs 50,000 crore

(US$ 8.26 billion) industry by 2016, driven by a 50-55 per cent per year growth over the next three

years, as per rating agency CRISIL. The growth of internet retail is also expected to boost offline

retail stores.

 

Urban markets account for the major share (65 per cent) of total revenues in the consumer durables

sector in India. Demand in urban markets is likely to increase for non-essential products such as LED

TVs, laptops, split ACs and beauty and wellness products. In rural markets, durables like refrigerators

as well as consumer electronic goods are likely to witness growing demand in the coming years as the

Government of India plans to invest significantly in rural electrification.

 

33

Page 34: Abhay Fmcg

Demand growth is likely to accelerate with rising disposable incomes and easy access to credit.

Increasing electrification of rural areas and wide usability of online sales would also aid growth in

demand.

Future Prospects:

The only threats to this strong growth trajectory remain the high portion of unorganized trade, the

limited distribution network of new entrants and the pressure on profit margins due to increasing

competition. But these are likely to be of diminished importance as proportion of organized trade

increases and players invest in improving distribution. Going forward, the industry prospects remain

attractive, and new graduates can hope to leverage the training and on-the-job learning at the leading

players in various functional roles, across the metros as well as the interior heartlands of India.

Scope of the Sector:

The Indian FMCG sector is the fourth largest sector in the economy. A well-established distribution

network, intense competition between the organized and unorganized segments characterizes the

sector.

 

Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery

categories are estimated to be the fastest growing segments, says an HSBC report. Though the sector

witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since then.

 

Growth Prospects:

With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG

market is something no one can overlook. Increased focus on farm sector will boost rural incomes,

hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will

improve their supply chain.

 

FMCG sector is also likely to benefit from growing demand in the market. Because of the low per

capita consumption for almost all the products in the country, FMCG companies have immense

possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if

34

Page 35: Abhay Fmcg

they are able to take the consumers to branded products and offer new generation products, they

would be able to generate higher growth in the near future.

 

Increase in the urban population, along with increase in income levels and the availability of new

categories, would help the urban areas maintain their position in terms of consumption. At present,

urban India accounts for 66% of total FMCG consumption, with rural India accounting for the

remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG

categories such as personal care, fabric care, and hot beverages.

In urban areas, home and personal care category, including skin care, household care and feminine

hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that

processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.

Indian Competitiveness and Comparison with the World Markets:

 

The following factors make India a competitive player in FMCG sector:

 

Availability of raw materials:

Because of the diverse agro-climatic conditions in India, there is a large raw material base

suitable for food processing industries. India is the largest producer of livestock, milk,

sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and

fruits & vegetables. India also produces caustic soda and soda ash, which are required for the

production of soaps and detergents. The availability of these raw materials gives India the

location advantage.

 

Labor cost comparison:

Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in

the world, after China & Indonesia. Low labor costs give the advantage of low cost of

production. Many MNC's have established their plants in India to outsource for domestic and

export markets. 

Presence across value chain:

35

Page 36: Abhay Fmcg

Indian companies have their presence across the value chain of FMCG sector, right from the

supply of raw materials to packaged goods in the food-processing sector. This brings India a

more cost competitive advantage. For example, Amul supplies milk as well as dairy products

like cheese, butter, etc

Growth of FMCG Industry over the years

  

36

Page 37: Abhay Fmcg

MARKETING STRATEGIES ADOPTED BY FMCG

Marketing strategy is a process that can allow an organization to concentrate its limited resources on the

greatest opportunities to increase sales and achieve a sustainable competitive. A marketing strategy

should be centered on the key concept that customer is the main goal.

 

SWOT Analysis Strategy:

Strengths:

a) Low operational costs

b) Presence of established distribution networks in both urban and rural areas

c) Presence of well-known brands in FMCG sector

Weaknesses:

a) Lower scope of investing in technology and achieving economies of scale, especially

in small sectors

b) Low exports levels

Opportunities:

a) Untapped rural market

b) Rising income levels i.e. increase in purchasing power of consumers

c) Large domestic market- a population of over one billion.

d) Export potential

e) High consumer goods spending

Threats:

a) Removal of import restrictions resulting in replacing of domestic brands

b) Slowdown in rural demand Tax and regulatory structure

FMCG MARKETING STRATEGY IN RURAL INDIA

Rural Marketing in India is still about a van campaign, a badly-made commercial, a few painted walls and

the occasional participation in village mandis and melas.

But then, "rural" means different things to different people: from 500,000 people for consumer durables,

to less than 50,000 for fast-moving consumer goods.

37

Page 38: Abhay Fmcg

 

Still, it is heartening to note the increasing awareness of the importance of rural markets - or, at least, of

companies wanting to move beyond urban boundaries.

 

According to estimates by the Rural Marketing Agencies Association of India, the total budget for rural

marketing is only about Rs 500 crores (Rs 5 billion), compared to the over Rs 13,000 crores (Rs 130

billion) allotted to mass media.

 

This is grossly inadequate to cover the huge potential for different products in rural markets. Of course,

clients' reluctance to spend big money for bigger results in rural markets is because there are no standard

performance yardsticks for judging the efficacy of the rural marketing efforts.

 

Companies like Cavin Kare (Chik Shampoo, Meera Herbal Powder, Fairever Cream and so on), Anchor

(100 per cent vegetarian toothpaste), Ghadi detergent powder and Power soap are proof that regional

brands can become brands to reckon with. And don't forget Nirma, the most enduring example of a brand

that began as a regional player and is now a giant.

What did these products do that was so different? Most of them identified a segment that was vacant in

terms of product and area of operation. They all started in small, concentrated markets, appealing to the

local ethos and aspirations of the targeted area.

 

Their communication, be it a simple radio spot or a wall painting or a theatre film, touched a chord in the

target audience. And, most importantly, their policies were flexible and they could adopt to fast changing

marketing situations.

What should companies do to step up their payback from rural marketing efforts? Here are some steps

that should help.

People power:

38

Page 39: Abhay Fmcg

Total commitment from top leadership, keeping in mind that rural marketing is a long-term

relationship, is imperative - the successes of Hindustan Unilever and ITC are proof of this

statement.

But even more important is the need for a dedicated task force. Rural marketing efforts need

special mindsets, which many of the urban-oriented management graduates who are at the

helm of affairs at most organizations do not possess.

A separate marketing and sales vertical headed by people with passion and commitment to

rural marketing and supported by a field team that can face the rough and tough of the vast

country-side with courage and conviction is a must.

The best bet is to recruit students from specialized institutes such as the Indian Institute of

Rural Management, or at least, management graduates who have studied the subject as an

elective.

Many of these are students from small towns, people with fire in their bellies who want to

prove themselves in big companies and have no issues about working in smaller markets. Pay

them well - remember and discuss the path their careers are likely to take in the organization.

And send them out in the field only after thorough training.

Ensure the consistency of the team involved in any project, until the completion of a specific

task.

 

Goals are good

Early on in the campaign, define your objective: is it a tactical effort to achieve increased sales

in specific areas during a specific time, or do you want to build a strong equity for your brand

in rural India?

Experience with FMCG companies shows that they are more interested in the first choice.

Most of them have previously appointed vendors who implement the company's ideas blindly,

be they van campaigns or below-the-line activities.

39

Page 40: Abhay Fmcg

There is very little effort to tailor whatever communication is made in such efforts, to suit the

local audience or fit it with the overall campaign efforts in the mass media.

This invariably leads to less than satisfactory results in terms of awareness of the brands and

long-term impact of the efforts in the targeted markets. If you are interested in the second

alternative, a comprehensive brand building strategy in rural India, with both short term and

long term goals, is a must.

 

Know your customers

A good place to begin is studying the mindset of your customers, so you can create a

customized plan of action. All too often, clients insist their knowledge of their customers

(based on studies of urban India) is enough on which to base an action plan. Our experience

shows that the attitudes, aspirations and fears of rural customers, with regard to products and

brands, are very different from their urban counterparts.

Research can give you invaluable ideas for new product development as well as new methods

of reaching your target audience. The refrigerator with standby power for 12 hours, pressure

cookers with two handles and a radio with key-winding mechanism are all the result of

research.

More and more companies turn to the local mandis to sell their products. While mandis offer

opportunities to target consumers from several villages at one place, and to that extent make

your effort cost-effective, ensure that the people who patronize these mandis are the kind who

will buy your brand.

  Ensure availability

It is a task of physically reaching your product to over 600,000 villages, most of them without

motorable roads. But it's not really as nightmarish as it is made out to be, at least keeping in

mind the present goals of marketing companies in rural India.

We've all heard about the shampoo sachets that are available in even the smallest villages.

How does that happen? It's a direct result of rising aspirations, fuelled by television

40

Page 41: Abhay Fmcg

commercials. The consumer demands the product from the local shopkeeper, who then buys

the products from the nearest feeder markets.

Which means if you can ensure distribution to the feeder markets in towns or villages with

populations of 10-15,000, you‘ve already taken the first step towards reaching your target

customer?

Studies also indicate that rural consumers prefer to shop for durables such as televisions,

automobiles and appliances in the nearest big town or city. So, if your products are in towns

with populations of 50,000, you're closer to the rural consumer than you would have thought.

 

41

Page 42: Abhay Fmcg

ROLE OF PACKAGING IN FMCG 

The importance of packaging design as a vehicle for communication and branding is growing in

competitive markets for packaged FMCG 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.

 

When consumers search for and process information in-store, the product's package can contain

relevant and useful information for the consumer. Product packaging forms the end of the 'promotion-

chain' and is close in time to the actual purchase and may therefore play an important role in

predicting consumer outcomes.

 

Packages also deliver brand identification and label information like usage instructions, contents, and

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 packaging is something which all buyers experience and which 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.

 

In addition to its benefits in terms of reach, some marketers believe that packaging is actually more

influential than advertising in influencing consumers, as it has a more direct impact on how they

perceive and experience the product.

 

42

Page 43: Abhay Fmcg

“In most cases, the experience has been that pack designs are more likely to influence the consumer

perception of the brand.”

 

For products with low advertising support, packaging takes on an even more significant role as the

key vehicle for communicating the brand positioning.

 

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.

 

Examples of FMCG generally include a wide range of frequently purchased consumer products such

as toiletries, soap, cosmetics, teeth cleaning products, shaving products and detergents, as well as

other non-durables such as glassware, light bulbs, batteries, paper products and plastic goods. FMCG

may also include pharmaceuticals, consumer packaged food products and drinks.

Unlike other economy sectors, FMCG share float in a steady manner irrespective of global market

dip, because they generally satisfy rather fundamental - as opposed to luxurious - needs.

 

The Relevance of Packaging as a Marketing Tool:

 

Never underestimate the importance of packaging. Marketers often measure consumer brand

perceptions and ignore the pack. Yet we know from 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 (Rice and Hofmeyr, 2000, Commitment-

led Marketing, pg 216). Before one can assess or question the current thinking regarding packaging

research (and whether the research into packaging suitably reflects its value within the marketing

mix), one must first assess whether packaging as a marketing tool really justifies more attention.

 

43

Page 44: Abhay Fmcg

FACTORS INFLUENCING PACKAGING DECISIONS

Packaging decisions are important for several reasons including:

 

Protection:

Packaging is used to protect the product from damage during shipping and handling, and to

lessen spoilage if the package is exposed to air or other elements.

Visibility:

Packaging design is used to capture customers‘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 and in situations, such as those found in grocery stores, where a product must

44

Page 45: Abhay Fmcg

stand out among thousands of other products. Packaging designs that standout are more likely

to be remembered on future shopping trips.

 

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.

 

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. For instance, a retailer may not

accept packages unless they conform to requirements they have for storing products on their

shelves.

 

Cost:

Packaging can represent a significant portion of a product‘s selling price. For example, it is

estimated that in the cosmetics industry the packaging cost of some products may be as high as

40% of a product‘s selling price. Smart packaging decisions can help reduce costs and

possibly lead to higher profits.

Expensive to Create:

Developing new packaging can be extremely expensive. The costs involved in creating new

packaging include: graphic and structural design, production, customer testing, possible

destruction of leftover old packaging, and possible advertising to inform customer of the new

packaging.

 

Long Term Decision:

When companies create a new package it is most often with the intention of having the design

on the market for an extended period of time. In fact, changing a product‘s packaging too

frequently can have negative effects since customers become conditioned to locate the product

based on its package and may be confused if the design is altered.

 

Environmental or Legal Issues:

45

Page 46: Abhay Fmcg

Packaging decisions must also include an assessment of its environmental impact especially

for products with packages that are frequently discarded. 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.

 

46

Page 47: Abhay Fmcg

PACKAGING AS A MEDIUM TO INCREASE SALES 

“Catching consumers’ 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.

 

A central conviction held by the packaging industry: that the shopper appreciates and in fact explicitly

wants to receive stimulation for the buying decision he is making when standing in front of the

supermarket shelf, often even preferring this to other forms of communication. He is keen to be

informed and inspired, tempted and pampered by surprising and persuasive functions, emotions and

sensual impressions.

 

THE TOP TEN REQUESTS ABOUT PACKAGING 

Even though the consumer is not dissatisfied with the packaging available on the market, he would

still like to be tempted by functional and attractive packaging ideas, by multisensory appeal and

creative design - preferably with packaging ideas made from board. He acknowledges additional

benefits and appeal and is even willing to pay an extra charge for them. 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 consumers' 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.

Special effort makes a special impression - and is allowed to cost more too.

 

2 Design, shape and color:

47

Page 48: Abhay Fmcg

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 in the cosmetics and confectionery product groups. Consumers like

to buy agreeably designed and decorative products.

 

3 Functionality:

Functional aspects are the basis for all successful packaging which contributes to overall higher

product success. Product and aroma protection, hygiene and tightness, environmental

responsibility and practical handling (in both use and storage) are just as important here as ideas

that improve comfort such as closure mechanisms, portioning, see – through windows displays,

etc.

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!

 

5 Material:

What is printed on board is read particularly willingly, while what is packaged in board sells

particularly well. Sustainability, easy disposal and, above all, great design variety and potential are

particular features of the material. Popular with consumers, particularly high appeal and many

other advantages too.

 

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 and, in addition, one that gets

closer to the consumer than all others. 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 favor. So much so that he is willing to pay a higher price for this

48

Page 49: Abhay Fmcg

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 packaging for something else

after the product has been consumed.

 

49

Page 50: Abhay Fmcg

RESEARCH FINDINGS AND ANALYSIS OF DATA

1. Do you identify a brand through its packaging?

o Yes

o No

Image is important in our society. The image that brands project is critical to their success, and those

images must be conveyed by packaging-the ultimate touch point for consumer product brands. If the

packaging doesn’t appeal to the consumer, why would the brand or product (too much space) appeal.

Consumers identify with the brands that match the perceptions of their lifestyles. The role of the package

designer has expanded from being a researcher, marketer and communicator to that of an image maker.

This may sound simple but it has actually added to the complexity surrounding the development of

successful packaging.

While analyzing the data, I realized that 91.8% of the sample identified a brand through its packaging,

while 8.2% did not.

2 Is your buying decision influenced by packaging?

o Often

o Sometimes

o Never

50

Page 51: Abhay Fmcg

Stand at the end of an aisle in the supermarket or large retail store. Can you, while scanning hundreds of

items, pick out a few that are instantly recognizable from that vantage point? Now, ask yourself what it is

about specific products that make them quickly identifiable from the myriad other products in the retail

environment. There has to be something unique about the packaging of those products that makes them

stand out.

What my survey highlighted was that 9.8% of the people are often influenced by the packaging for

consumer buying, 8.2% are never influenced and 82% are sometimes influenced.

3 Does Packaging influence you to switch from one brand to another?

o Yes

o No

Remember that today’s savvy consumer wants to be associated with a certain lifestyle and wants to be

associated with the products that fit that profile. Consumers will be motivated to purchase products that

project the right image for them. Packaging will have to do increasingly more work to sell brand and

product, creating image and consumer perception in the process, as retail environments become more

crowded with offerings. When products meet with consumer expectations, time after time, consumers will

not only become loyal customers, they will generally spread the word about how wonderful these

products are to their circle of family and friends.

51

Page 52: Abhay Fmcg

However, on the contrary to the above research findings, 50% of the sample does not switch from one

brand to another on account of packaging, while 50% are influenced by packaging to switch from one

brand to another

4 What factors according to you describe a good package?

o Package should be Protective

o Package should be Eco-friendly

o Package should be Convenient

o All the above

While analyzing the results, I found out that 19.7% of the respondents felt that the package should be

protective, 13.1% of the respondents felt that the package should be eco-friendly, 4.9% of the respondents

felt that the package should be convenient and 62.3% respondents said all of the above.

5 Which of the following aesthetic factor attracts you towards the purchase of an FMCG

product?

o Color, Texture and Contrast

o Shape and Size

o Cultural References

o Emotional Response

52

Page 53: Abhay Fmcg

Packaging has an important role in marketing. It protects the product and helps in sales promotion. So, the

container or cover, design of packaging, color, size etc. should be suitable to the nature of product. It also

should be convenient, attractive, economical, communicative etc. Only good and effective packaging can

protect the product, keeps safe from declining its quality, it makes adulteration impossible. Good

packaging also increases prestige, brand loyalty and promotes sales.

Majority of the respondents (56.7%) said that color, texture and contrast attracted them towards the

purchase of an FMCG product, 11.7% said shape and size mattered, 3.3% are affected by cultural

references and 3.3% felt an emotional response.

6 Do you deliberately purchase a product whose package has a reusable value?

o Yes

o No

The Indian consumer always wants to make maximum use of the amount that he is spending. Therefore

also, some consumers deliberately purchase a product whose package has a reusable value. However, the

results have shown that majority do not have that thinking in mind.

53

Page 54: Abhay Fmcg

49.2% respondents deliberately purchase a product whose package has a reusable value, while 50.2%

respondents made no such deliberate purchase.

7 Select the most preferred packaging material that you would opt for:

o Paper

o Glass

o Aluminium

o Fiberboard

o Plastic

o Steel

o Any other, Specify

The most widespread types of packaging material are paper, glass, aluminium, fiber board, plastic and

steel.

The use of plastic as packaging material tops the list with 23%, brings so many advantages for

instance plastic is light weighted, long lasting and easily available material. The cost of plastic is a

bit cheaper as compare to aluminum and steel.

- Paper is preferred by 41% of respondents. It is one of the most extensively used packaging

materials, because of it being light in weight, cheap in price and easily available.

- The use of Glass, as Packaging Material has almost been given up, especially for food items,

clearly indicated by only an 9.8% response.

54

Page 55: Abhay Fmcg

- Aluminium, voted by 8.2% respondents is commonly used in packaging of food items, such as in

cans of soft drinks and in tin packed provisions as foil to protect foodstuff from decomposition by

preventing access of oxygen.

- Steel being the least popular with 3.3% is being used as packaging material for foods, beverages

and paints as well as aerosols.

- Fiberboard is a paper-based material consisting of a fluted corrugated sheet and one or two flat

linerboards was voted by 9.8% respondents.

8 Your attitude towards the new packaging of preserved products

o Will always prefer innovative packaging

o Does not like the frequent change in packaging

o Will prefer unpacked food product

o Will prefer hygienic packaging

Because packaging helps to control the immediate environment of a food product, it is useful in creating

conditions that extend the storage life of a food. Packaging materials commonly used for foods may be

classified as flexible (paper, thin laminates, and plastic film), semi-rigid (aluminum foil, laminates,

paperboard, and thermoformed plastic), and rigid (metal, glass, and thick plastic). Plastic materials are

widely used in food packaging because they are relatively cheap, lightweight, and easy to form into

desired shapes.

- 54.1% respondents prefer hygienic packaging for preserved products

- 37.7% respondents prefer innovative packaging

55

Page 56: Abhay Fmcg

- 6.6% respondents don’t like frequent changes in the packaging

9 You change your purchase decision when you see ‘eco-friendly’ printed on the label of a

product:

o Often

o Sometimes

o Never

Eco-friendly packaging is the development and use of packaging which results in improved sustainability.

This involves increased use of life cycle inventory (LCI) and life cycle assessment (LCA), to help guide

the use of packaging which reduces the environmental impact and ecological footprint.

- 47.5% respondents sometimes changed their purchase decision when they saw ‘eco-friendly’

printed on the label

- 27.9% respondents never changed their purchase decision when they saw ‘eco-friendly’ printed on

the label

- 24.6% respondents often changed their purchase decision when they saw ‘eco-friendly’ printed on

the label

10 You are willing to pay more for eco-friendly FMCG products:

o Always

o Sometimes

o No

56

Page 57: Abhay Fmcg

The process of engineering more environmentally acceptable packages can include consideration of the

costs. Some companies claim that their environmental packaging program is cost effective. Some

alternative materials that are recycled/recyclable and/or less damaging to the environment can lead to

companies incurring increased costs. It is common that when any product begins to carry the true cost of

its production (producer pays, producer responsibility laws, take-back laws), there may be an expensive

and lengthy process before the new forms of packaging are deemed safe to the public, and these

incremental costs are ultimately passed on to the ultimate buyer.

- 47.5% respondents are sometimes willing to pay more for eco-friendly FMCG products

- 32.8% respondents are always willing to pay more for eco-friendly FMCG products

- 19.7% respondents are not willing to pay more for eco-friendly FMCG products

57

Page 58: Abhay Fmcg

RECOMMENDATIONS

- Product packaging is valuable for brand equity, product differentiation, market segmentation, new

product introduction, pricing, promotion etc. Brand name using plan implementation must be

effective in the units.

- All the marketing units must pay attention towards good packaging as people identify a brand

through its packaging; it induces them to purchase FMCG products and it also leads to shifting

customer loyalty. They accept that poor packaging is one of the causes of product failure in the

market. It is necessary to set the packaging standard and to implement accordingly for better

protection and promotion of a product.

- The package must be of such material that the customer prefers and which has a reusable value to

the end customer.

- New consumer product manufacturers mostly use the package as a communication medium. It

describes where it was made, when it was made, what it contains, how to use it etc. Furthermore

they believe that the consumers are properly guided by label to use the products.

- The ‘eco-friendly’ label has an immense value and must be highlighted while promoting the

product in the market. There is a section of society that is environment conscious and would not

mind paying a higher price for products with an ‘eco-friendly’ package.

58

Page 59: Abhay Fmcg

CONCLUSIONThe world is rapidly turning into a global village and with the passage of time business is being

expanded; and the importance of using correct type of packaging material has become essential.

- Packaging is rightly called an art because packaging material is first the introduction of any

product to the consumers, as well as it provides a physical blockade between a product and the

surroundings by maintaining hygiene and reducing the risk of product wastage due to impurity.

Packaging is indispensable for a safe distribution, storage, sale, and use.

- Packaging can be described as a coordinated system of preparing goods for safe, efficient and

cost-effective transport, distribution, storage, retailing, consumption and recovery, reuse or

disposal combined with maximizing consumer value, sales and hence profit.

- Packaging is a tool to form good relationship between Retailers and Food Manufacturers because

both work more closely to create products designed for current lifestyles, based on the latest

technology. A Retailer, having direct link with end users, can easily be well aware of the

perception of consumers. On the other hand manufacturers modify packaging style and product

quality on the basis of information provided by retailers.

- Numerous market trends suggest a growing role of packaging as a brand communication vehicle

that helps in reducing expenses on traditional brand building mass media advertising. Importance

of the role of packaging is acknowledged round the globe for brand building and consequently the

59

Page 60: Abhay Fmcg

expenses on advertisement have been found to be reduced. Once a brand becomes familiar and

captitalizes on factors such as Color, Texture and Contrast, Shape and Size, Cultural References,

- Emotional Response – companies do not have to spend a huge amount on advertising because

consumer will reach the brand automatically.

- Packaging attracts and sustains attention, helping consumers identify with the images presented

and therefore induce them to purchase the product or shift brand loyalty.

BIBLIOGRAPHY

RESEARCH PAPERS:

- Sahil Mahajan, Rahul O Vaishya, Anurag Gupta, Veejhay Dholle "Role of Packaging for

Enhancing the Sales Appeal" Global Research Analysis International July 2013

WEB LINKS:

- http://www.ukessays.com/essays/business/the-relationship-between-different-packaging-

characteristics-business-essay.php#ixzz2HanAaW4e

- www.marketinglord.blogspot.com

- www.packaginghub.org

- http://www.foodproductiondaily.com/Packaging/Effective-packaging-grabs-snackers

- http://www.britannica.com/EBchecked/topic/212684/food-preservation/50583/Packaging 60

Page 61: Abhay Fmcg

- http://blog.hubspot.com/marketing/why-people-buy-factors-influence-purchase-descision

61