Environmental Influences on Packaging

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Environmental Influences on Packaging

• Natural Resources
• Climate
• Ecology

Demographics Economics Science/Technology Politica
l/Legal Social Values
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Evolution of Product Packaging for Coca Cola
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Packaging Objectives
Protection of Product Function
(Containment, Transit, Storage,Tampering)
Promotion Imagery
(graphics color brand mage)
Product Label/instruction
Customer demands .. Convenience in use
This coffee is the best tasting coffee in the
world. Thats because its made with 100
arabica beans, the finest beans money can buy.
(Size, shape, weight)
Product amount
12 oz.
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Packaging Decisions

• Focus on the wrapping and containment decisions
  involved in physical design (size-shape-safety)

• Promotional Role (Informing the Consumer)
• Verbal and nonverbal symbols
• Size, shape, texture, color and graphics
  (graphics color brand mage)
• Psychological impact usage
• Convenience in use
• Environmentally Responsible
• Biodegradable and recyclable
• Ecological impact

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Major Packaging Considerations

• Protection of Product Function
• (Containment, Transit, Storage, Tampering)

• Cost of Packaging (production material)
• Limited consumer willingness to pay for better
  packaging

• Reseller Needs ..shipping and handling
  
• Transportation, storage,..

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Product Standardization or Adaptation?
Sell product as is
Modify product for other country
Design new product for new markets
Introduce a global product
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Dominos Pizza

• Satisfy an unmet need/want
• (Food?, Convenience?, Time?)
• Octagon Package
• (Saves Heat)

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Product Package
Tangible Product (packaging)
Core Product (ring)
Augmented Product (psychological benefits)
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Field Tests for Packaging Analysis

• A. Laboratory Tests
• Strength / Durability of Material
• B. Dealer Tests
• Storage / Handling / Shape
• C. Visual Tests
• Color / Graphics / Legibility
• D. Customer Acceptance / Usage
• Image / Function/Safety-Tamper Proof

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Tamper-Resistant Packaging - FDA regulations and
consumer safety concerns

• PRODUCT TAMPERING

SAFETY FEATURES
Tylenol Capsules Listerene
Mouthwash Computer Access
Plastic wrap
Plastic wrap
Voice Prints
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Multiple Packaging

• Family Packaging
• Similar packaging for all of a firms products or
  packaging that has one common design element

small
medium
large
Secondary use
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Ethical Issues In Packaging

• Issues
• - Deception Look alike (knockoffs)
• - Concealing a downsized product
• - Hidden Environmental Effects
• (glass, paper, plastic)
• - High Costs for Image (color, etc.)
• - Safety in use and from tampering

FRAGILE
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Applied Marketing

• After Years Of Super-sizing, Food Makers Shrink
  Portions
• (And Fatten Profit Margins)

Wall Street Journal January 28, 2004
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Company Benefits

• Profit margins Can Sell Products at Higher Price
  per Unit
• Consumer orientation Smaller portions are in
  demand by nutritionists and consumers

• Relationship Marketing
• Weve got to recruit new users and hold on to
  users as they age - Bill Elmore, President,
  Coca-Cola Co
• Total Quality Management
• Continuous improvement of a product to keep a
  brand competitive

• The new cans of soda force the consumers to
  change their mindset about value.

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Company Benefits

• Can Sell Products at Higher Price per Unit
• Soft Drink Sales

After Years Of Supersizing, Food Makers Shrink
Portions,(And Fatten Profit Margins),WSJ, 28Jan
2004
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• Took their popular brand of soft drinks and
  re-released them in 8oz cans and 12oz. Bottles.
  (an alternative)
• The product is aimed at light users and aging,
  weight-conscious baby boomers. .

• Hoagie franchise that just introduced a 4.5 ounce
  triangular sub called Diamond Mini Meltz.

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Consumer Behavior Advantages

• A new way to recruit and maintain current product
  users.
• Storage of product is much easier.
• Sodas do not become warm and flat before you can
  finish them.

• Reduce temptation to drink too much soda.
• Cans of soda aren't too large for children.
• The product caters to Americas current obsession
  to loose weight.

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Brands of Nestlé
Applied Marketong

• Alpo
• Butterfinger
• Hot Pockets
• Libbys Juicy Juice
• Nestlé Toll House
• Nesquick
• PowerBar
• Tasters Choice

The Perils of Packaging Nestlé Aims for Easier
Openings WSJ, Nov. 17, 2005
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Why Change the Package?

• Ease of opening the product (convenience)
• Target markets kids and aging baby boomers
• On-the-go (in the car, running, etc.)
• Tamper-resistant hold up during shipment
• Updated, fresh look (Nescafé push button lid)
• Costs

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Research

• Ideas are free
• Customer insights collected from the call center
  (sent letter and got exclusive rights)
• Called back several hundred customer ideas
  gains customer support as well
• Nestlés 8 oz. coffee jar too small made it 15
  oz. (sales jumped)
• Pastel-colored packaging of CoffeeMate was too
  light brightened package
• Observation observed runners at mile 17 of 2004
  NYC Marathon using PowerGel
• Focus groups opening lids, discussion of
  whether theyd purchase the product

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Costs of Updating Packaging

• Costs are biggest problem raises because of oil
  prices (ingredient of water bottles, film wrap,
  etc.)
• Prices for plastic packaging rose 20-35 in 2004
• Spends 6 billion per year on packaging

• Costs range from less than 1 to 15 of overall
  cost to make the product
• Re-sealable zip-lock plastic bags add an average
  of 20 to packages
• However, these options are demanded by consumers

"Your most loyal consumers represent 70 of your
volume," says Marty Sharkey. "You'll find the
money to keep that group satisfied."
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Relating to Textbook

• Chapter 2 Controlling Marketing Strategies
• Nestlé compared their expected level of
  performance of PowerGel to the actual
  performance, then took corrective action
• Chapter 3 Legal and Regulatory Forces (FDA)
• It is mandatory that packaging is
  tamper-resistant so it must be tough, yet easy to
  open
• Chapter 5 International Marketing
• Nestlé is based in Vevey, Switzerland
• Reaches customers all over the world (USA)
• Chapter 7 Marketing Research
• Collecting Data focus groups, observation,
  telephone survey

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Relating to Our Textbook

• Chapter 7 8 Target Markets Consumer Behavior
• Demographics Age and family
• Behavioristic Brand loyalty, price, end use
• Chapter 11 Product Concepts
• Product line Pet care, baby food, beverages,
  prepared foods, chocolate and candy, dairy
  products, bottled water, breakfast cereals, ice
  cream, food services
• Chapter 12 Developing and Managing Products
• Quality/Functional/Aesthetic Modifications more
  convenient, appealing, and durable
• Chapter 13 Branding and Packaging
• Nestlé is a major brand name
• Altering the package (updated the style) and
  innovative packaging (unique and easier to use)

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References

• Ball, Deborah. "The Perils of Packaging Nestlé
  Aims for Easier Openings." Wall Street Journal 17
  Nov. 2005 B1.
• "FPA Congratulates Its Winners." 2001. Flexible
  Packaging Association. 28 Nov. 2005
  lthttp//www.flexpack.org/achiev/2001winners.aspgt.
  
• Moore, John. "Ideas are Free ... just ask
  Nestle." Brand Autopsy. 15 Sep. 2004. 28 Nov.
  2005 lthttp//brandautopsy.typepad.com/brandautopsy
  /2004/09/ideas_are_free_.htmlgt.
• "Smarties set to lose their tube ." Online
  posting. 18 Feb. 2005. Do you have fond memories
  of the Smarties tube?. 28 Nov. 2005.
  lthttp//news.bbc.co.uk/1/hi/business/4276553.stmgt.
  
• Toops, Diane. "Food Biz Kids Perfect easy-to-go
  brownie." Food Processing Magazine . 28 Nov. 2005
  lthttp//www.foodprocessing.com/articles/2005/299.h
  tmlgt.

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Section 2 Package Labeling

• Green Labeling
• Labeling packaging as made of recyclable
  materials
• Provide information on product origin
• Made in the USA

• Universal Product Code (UPC)

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Asparagus From Afar
Kilman, Scott. Grocers, Meatpackers Fight Law to
Label Origin of Foods. WSJ, June 26, 2003
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Whacky Warning Label Contest
Applied Marketing

• 1st Prize Label on Drain Cleaner Bottle if
  you do not understand , or cannot read, all
  directions, cautions and warnings, do not use
  this product.
• 2Nd Prize Snow sled label
  Beware sled may develop high speed under
  certain snow conditions

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Applied Marketing
Molson Campaign Spoofs the Genre
- Tough-guy
- Smooth-guy
- Macho-guy
Target Market Men, Ages 21-29
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Some of the new labels include
Applied Marketing

• I Put the Super In Superficial Lager
• Guess Where My Tattoo Is Lager
• Lets Get Out Of These Wet Clothes Lager
• Skinny Dippers Are People Too Lager
• Ask Me About My X-Ray Vision Lager
• http//www.twinlabel.com/main.php

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Money spent on advertising in 2001

• Molson- 3.1 million
• Anheuser-Busch- 331.7 million
• Heineken- 69.2 million

• Product Differentiation
• Molson hopes to set their beer apart from its
  competitors by introducing new humorous labels on
  their products to attract more consumers

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Labeling Information Value

• Source of Product (who,when,where)
• Content Identification
• Use of Product-instructions ( of
  Servings.etc.)
• Promotion graphic design
• Legal
• Potential Hazards
• Nutrition

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Nutrition Facts Points of Confusion
Parker-Pope, Tara. A Fat-Free Product Thats
100 Fat How Food Labels Legally Mislead. WSJ,
D1, July 15, 2003.
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Ethics Product LabelingA case example

• Wineries Govt Class over Ads that Toast Health
  Benefits of Drinking
• CBS 60 Minutes suggested that moderate wine
  consumption may reduce the risk of heart
  disease...
• Red wine sales soar...
• Govt threatened to close a winery down
• First Amendment Issue?...(No)

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Case example
Oregon May Require Labels on Genetic Food

• Measure 27 - Require food companies to label
  products that contain genetically modified
  ingredients
• More likely to be approved by consumers than
  politicians

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GENETICALLY MODIFIED INGREDIENTS

• 70 of processed food contains genetically
  modified
• Corn
• Soybean
• Other crops
• Have not been shown to cause health problems

• Resist pests and weed killers
• Easier for farmers to grow

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ANTI-LABELING GROUP

• Special packaging just for Oregon
• Costly headache for farmers, food makers, and
  supermarkets
• Anti label group members
• Crop Life International
• PepsiCo Inc.
• General Mills Inc.
• Kellogg Co.
• Sara Lee Corp.
• H.J. Heinz Co.

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PRO LABEL GROUP

• If food is safe and the technology is great, why
  not put a label on it and let me have a choice
• Give Oregonians a choice
• Have more than 100,000 signatures and 7 other
  states are interested
• Perishable products are produced locally
• easier to comply with state labeling law

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Section 3Packaging Color

• Product Congruency COLOR
• 1. Competitive
• 2. Believable
• 3. Consistent

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COLOR Theory

• Color carries a connotation influenced by
• - Culture
• - Personal memories
• - Physiology

• Principle Color influences product sales
• Colors send different signals
• (conscious and unconscious)

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Kraft Cheese
Applied Marketing

• Objective to increase packages eye appeal
• Shelf appeal make their products stand out from
  the rest
• Consumer Behavior Kraft is trying to make a
  bigger splash at the dairy case because most
  shoppers spend just 1 ½ seconds before choosing a
  brand
• Tactic use catchy colors animation, Example -
  cow

• Kraft is also working to give cheese a healthier,
  sexier image
  Love it Gotta Have it

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COLOR VISIBILITY

• Color ads produces 35 increase in readership
  versus Black White.
• Orange - 118
• Yellow - 113
• Blue - 100
• 10 of the population are color blind
• Package Size Increases w/lighter colors
• Decreases w/darker colors
• (Mc
  Neal,J., C. B. 1982)

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Color Associations

• Orange Conveys strength - fall, harvest.
• Blue White Clean and gentle.
• Red Symbolizes blood fire.
• Masculine in appeal. Anger action.
• Stimulates appetite desire.

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Color Associations

• Blue cool, truthful, formal, purity, loyalty.
• sky,sadness, water,coldness
• Green wet, nature, calmness, spring.
• (also molds, bacteria, spoilage)
• Black mystery, mourning, death,
  heaviness
• Yellow sunlight,caution,warmth,visibility

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Cultural differences in Color Associations

• Beware when bearing gifts on foreign lands - and
  beware of the color...
• Brazil- Purple is a death color, Scotch is more
  popular than bourbon
• England - Apparel and soap are considered a bit
  personal. White lilies suggest death, but other
  flowers are okay
• Hong Kong - White is for funerals, but Red is
  popular in all Chinese-speaking areas.

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