Factors in 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 protect 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 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 – 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.

Labeling
Most packages, whether final customer packaging or distribution packaging, are imprinted with
information intended to assist the customer. For consumer products, labeling decisions are
extremely important for the following reasons.
  Labels serve to capture the attention of shoppers. The use of catchy words may cause
strolling customers to stop and evaluate the product.
 The label is likely to be the first thing a new customer sees and thus offers their first
impression of the product.
 The label provides customers with product information to aid their purchase decision or
help improve the customer’s experience when using the product (e.g., recipes).
 Labels generally include a universal product codes (UPC) and, in some cases, radio
frequency identification (RFID) tags, that make it easy for resellers, such as retailers, to
checkout customers and manage inventory.
 For companies serving international markets or diverse cultures within a single country,
bilingual or multilingual labels may be needed.
 In some countries many products, including food and pharmaceuticals, are required by
law to contain certain labels such as listing ingredients, providing nutritional information
or including usage warning information.

Labeling
Most packages, whether final customer packaging or distribution packaging, are imprinted with
information intended to assist the customer. For consumer products, labeling decisions are
extremely important for the following reasons.

 Labels serve to capture the attention of shoppers. The use of catchy words may cause
strolling customers to stop and evaluate the product.
 The label is likely to be the first thing a new customer sees and thus offers their first
impression of the product.
 The label provides customers with product information to aid their purchase decision or
help improve the customer’s experience when using the product (e.g., recipes).
 Labels generally include a universal product codes (UPC) and, in some cases, radio
frequency identification (RFID) tags, that make it easy for resellers, such as retailers, to
checkout customers and manage inventory.
 For companies serving international markets or diverse cultures within a single country,
bilingual or multilingual labels may be needed.
 In some countries many products, including food and pharmaceuticals, are required by
law to contain certain labels such as listing ingredients, providing nutritional information
or including usage warning information.