NAGINDAS KHANDWALA COLLEGE

OF COMMERCE, ARTS AND MANAGEMENT STUDIES MALAD (WEST)

A PROJECT REPORT ON :

“Role of Packaging in sales of FMCG products”

IN PARTIAL FULFILMENT OF

BACHELOR OF MANAGEMENT STUDIES

(BMS)

ACADEMIC YEAR

2014-2015

SUBMITTED BY
SANCHIT GANGAR
TY BMS, ROLL NO 515 (SEMESTER V)

UNDER THE GUIDANCE OF

PROF. RAMNATH NATESAN IYER

SUBMITTED TO

UNIVERSITY OF MUMBAI
ACKNOWLEDGEMENT

It was an immensely pleasurable experience in working on this project on the Topic -

Role of Packaging in sales of FMCG products. However, my efforts alone could not
have been sufficient for completion of this project. Invaluable advice & suggestion
from large number of people have gone into this project. I am extremely grateful to
all these people who have helped me in collecting valuable information & helping
me in completion of project.

The foremost among them in my guide and our Prof. Ramnath Natesan Iyer whose
constant corrective guidance & motivation enabled a focused effort towards
completion of the project. I am also very grateful to my parents for being extremely
supportive in the endeavour of mine.
 (2)

Index
Contents: Page No:

1. Introduction to Packaging 5 - 13

2. Packaging Industry: 14 - 19

 History
 Overview
 Major Players in the Market

3. Packaging Types 20 - 21

4. Functions of Packaging: 22 - 23
 Protective Function
 Sales Function
 Promotion Function
 Service Function
 Guarantee Function

5. Packaging and Marketing 24 - 25

6. Waste Management of Material used in packaging 26

7. Overview of FMCG Industry 27 - 29

8. Marketing Strategies adopted by FMCG 30 - 31

9. Role of Packaging in FMCG 32 - 36

10. Factors Influencing Packaging Decisions 37

11. Packaging Expenditure 38

 (3)

Contents: Page No:

12. Packaging as a Medium to Increase Sales 39 - 44

13. Trends of Packaging 45 - 47

14. Case Study: Coca Cola 48 - 50

15. Survey on: 51 - 54

- Consumer Behaviour towards Packaging of FMCG Products‖

 Statement of the Problem

 Objective of the Study
 Hypothesis
 Significance of the Study
 Methodology
 Sample Design

16. Questionnaire Analysis and Research Findings 55 - 64

 Tabulation
 Pie-Diagram
 Interpretation
 Recommendation

17. Conclusion 65 - 67

18. Bibliography 68

19. Annexure: 69 - 70

 Questionnaire
 Terminology
 (4)

1. INTRODUCTION

“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 it will more or
less sell itself. With the evolution of modern retail, though, 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," says Future Group's Mall.

Cadbury India's Sethi 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.
5
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 or not achieving sales targets. Remember the following:

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 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.

6
Meaning :
Packaging 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.
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.

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. The original
slanted-roof metal container used for Log Cabin Syrup was changed to a design
that was easier to stack after grocers became reluctant to devote the necessary
amounts of shelf space to the awkward packages. Other distribution-related
packaging considerations include:

 Labeling: You may be required to include certain information on the label of your
product when it is distributed in specific ways. For eg, labels of food products sold in
retail outlets must contain information about their ingredients and nutritional value.

 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 reclose. If, on the other hand, your
product should not be opened by anyone other than the purchaser--an over-the-
counter medication, then the packaging will have to be designed to resist and reveal
tampering.

 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.

 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.
7
History :

From 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:

 Contain products, defining the amount the consumer will purchase.

 Protects products from contamination, from environmental damage and from

theft

 Facilitate transportation and storing of products.

 Carry information and colorful designs that make attractive displays.

For each product's needs, there are good packaging solutions. Though packages are
often taken for granted, they are the result of many years of innovation -- in some
cases accidental. A brief review of the more popular packaging developments is
included in this fact sheet:
8
Paper and Paper Products :

One way of placing packages into categories is to describe them as flexible, semi
flexible, or rigid. Flexible packaging includes the paper sacks that dog food comes in,
the plastic bags that hold potato chips and the paper or plastic sacks in which we
carry home our purchases.

An example of semi-flexible packaging is the paperboard boxes that cereal, many

other food products, small household items, and many toys are packaged in. For
many non-food items, the packaging is made more rigid by formed packing materials
that slip inside the box and hold the product and its accessories or components in
place.

Forms of rigid packaging include crates, glass bottles, and metal cans. Cloth or paper
may be the oldest forms of flexible packaging.

9
Glass:

Although glass-making began in 7000 B.C. as an offshoot of pottery, it was first

industrialized in Egyptian 1500 B.C. Made from base materials (limestone, soda,
sand and silica), which were in plentiful supply, all ingredients were simply melted
together and molded while hot. Since that early discovery, the mixing process and
the ingredients have changed very little, but the molding techniques have progressed
dramatically.
At first, ropes of molten glass were coiled into shapes and fused together. When the
blowpipe was invented by the Phoenicians in 3000 B.C., it speeded production.
Colors were available from the beginning, but clear, transparent glass was not
discovered until the start of the Christian era.
The split mold, which was developed in the 17 th and 18th centuries, further provided
for irregular shapes and raised decorations.

As techniques were further refined in the 18th and 19 th centuries, prices of glass
containers continued to decrease. Owens invented the first automatic rotary bottle
making machine, patented in1889. Suddenly, glass containers of all shapes and sizes
became economically attractive for consumer products, glass containers dominated
the market for liquid products.

As a type of "rigid packaging," glass has many uses today. High weight, fragility and
cost have reduced the glass markets in favor of metal and plastic containers. Still, for
products that have a high quality image and a desire for high flavor or aroma
protection,glass is an effective packaging material.

10
Metals:

Ancient boxes and cups, made from silver and gold, were much too valuable for
common use. Metal did not become a common packaging material until other metals,
stronger alloys, thinner gauges and coatings were eventually developed. One of the
"new metals' that allowed metal to bemused in packaging was tin. Tin is a corrosion-
resistant metal, and ounce-for-ounce, its value is comparable to silver. .

The term 'tin can' referred to a tin-plated iron or steel can and was considered a cheap
item. Today many still refer to metal cans as 'tin cans'.
In 1764, London tobacconists began selling snuffing metal canisters, another type of
today's "rigid packaging." But no one was willing to use metal for food since it was
considered poisonous.

The safe preservation of foods in metal Containers were finally realized in France
in the early1800s. In 1809, General Napoleon Bonaparte offered 12, 000 francs to
anyone who could preserve food for his army. By 1866 the first printed metal boxes
were made in the United States.

Although commercial foils entered the market in 1910, the first aluminum foil
containers were designed in the early 1950s while the aluminum can appeared in
1959.

11
Plastics:

Plastic is the newest packaging material in comparison with metal, glass, and paper.
Although discovered in the 19th century, most plastics were reserved for military and
wartime use. Plastics have become very important materials and a wide variety of
plastics have been developed over the past 170years.Several plastics were discovered
in the nineteenth century: styrene in 1831, vinyl chloride in1835, and celluloid in the
late 1860s.

However, none of these materials became practical for packaging until the twentieth
century. Styrene was first distilled from a balsam tree in1831, but the early products
were brittle and shattered easily. Germany refined the process in 1933 and by the
1950s Styrofoam was available worldwide. Insulation and cushioning materials as
well as foam boxes, cups and meat trays for the food industry became popular.

In the interim, polyethylene film wraps were reserved for the military. In 1933, films
protected submarine telephone cables and later were important for World War II
radar cables and drug tablet packaging. Other cellophanes and transparent films have
been refined as outer wrappings that maintain their shape when folded. Originally
clear, such films can now be made opaque, colored or embossed with patterns. One
of the most commonly used plastics is polyethylene terephthalate (PETE). This
material only became available for containers during the last two decades with its use
for beverages entering the market in 1977. By 1980, foods and other hot-fill products
such as jams could also be packaged in PETE.

12
A Review:

From containers provided by nature to the use of complex materials and processes,
packaging has certainly changed. Various factors contributed to this growth: the
needs and concerns of people, competition in the marketplace, unusual events (such
as wars), shifting lifestyles, as well as discoveries and inventions. Just as no single
cause influenced past development, a variety of forces will be required to create the
packages of the future, but a very important factor will always be consumer choice.
Ultimately, only the packaging that our society demands is produced. We choose by
the products we purchase.

Current packaging designs are beginning to incorporate recyclable and recycled

plastics but the search for reuse functions continues.

13
 2. PACKAGING INDUSTRY

A. History :

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.

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 submersed in boiling water. In 1810 Appert published his
prize-winning essay on food preservation and the French emperor Napoleon awarded
the 12,000-franc prize to him.

14
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. 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 like P.
D. Armour to emerge in Chicago and Cincinnati.

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. In the early twentieth century, the heavy cans were replaced by those
made of lighter materials, and manufacturers could stress that their products were
hygienically processed. 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.
15
 B. Overview :

The global packaging industry is approximately a $433 billion market. The domestic
packaging market, which is the major focus of this report, represents approximately
29%, or $124 billion of the global market. The industry consists of four general
segments classified by material type: paper and board, plastics, glass and metal. The
largest segments of the industry are paper and board and plastics, which account for
36% and 35%, respectively, of the global packaging market. The packaging industry
is a large, fragmented market with thousands of competitors.

While packaging companies serve a variety of markets, the largest end markets for
packaging products are food and beverage. Food packaging accounts for
approximately 40% ($175 billion) of all packaging applications. Beverages represent
approximately 18% or $80 billion. These end markets are stable, non- cyclical,
steadily growing markets that are attractive, regardless of the economic climate.

The growth rate of the packaging industry is primarily driven by growth rates and
market trends within various end markets. Growth rates vary from a low of 3.2%
for beverages to a high of approximately 5% for health care products. The largest
end market, food, has historically grown at slightly less than 4% annually.

While the beverage market has generally been a low growth market, the bottled water
sub segment of the beverage market has recently achieved very strong growth. Due to
FDI in retail sectors, the Retail Sector in India is expected to grow by 20 % in the
next 10 years. These developments will give a boost to all the sectors, Packaging
Industry in particulars and open up tremendous opportunities in the packaging
Industry.

16
 Indian Packaging Scenario:

1) Indian Packaging Industry is worth Rs. 2, 00,000 crores with growth rate varying
from 5% in some sectors to as much as 20% in Sectors like Flexible Packaging,
compared to 3% in developed countries.

2) Most of the basic raw materials needed for Packaging Industry such as Paper,
Board, Plastic, Glass, Metal and others are available in abundance.

3) Packaging Machinery Sector involved in making Packaging Converting Machines,

Product Packaging Machines and allied equipments have adopted modern
technology are exporting the machines even to developed economies of the world.

4) Over 40% of Export is done by small and medium Sector Industries where
Packaging Industry has its major presence.

5) A number of State of Art Package Converting and Manufacturing plants have been
set up in the country; some of them are exporting to developed countries.

17
 C. Major Players in the Market :

1. Flexible Packaging:

a. Industry :-
 Consists of typically multilayered laminated sheets or a combination of various
subtracts such as polymers, aluminum fibers and paper.

 Market around Rs. 2000 crores (US $ 465 mn.)

 Laminated sheets are generally a combination of polyester films, BOPP,

Polyethylene, etc. Others - metallic packaging, co-extruded fibers, lamination.

 BOPP and polyester film are major raw materials - account for 60% of the raw
materials cost.

b. Players :-
 Paper Products, Akar Group (Akar Laminates, Sharp Industries, Vishnu Vijay
Packers, Orient Press, India Foils, Flex Industries, RT Packaging, Mukund
Flex Pack, etc.

2. Films:
a. Industry :

 Market around Rs. 400 crores (US $ 90 mn.).

 Polypropylene is the basic raw material for BOPP films.
 India‘s share of the world market of 2 mntpa (million tones per annum) is very
low <5%

b. Players :

 Segment dominated by Cosmo Film (14500 T) and Gujarat Propak (11500T).

 Others - Sharp Industries, Max India, Supreme Oriented Films, MM RubberCo.,
Hindustan Adhesives, etc.

18
3. Polyester Films:

a. Industry:

 Market around Rs. 850 crores (US $ 195 mn.)

 First segment to enter packaging
 Initially polyester films were imported
 Now packaging polyester films are made from polyester films which are in turn made
from Di methyl terepathalate (DMT), Purified Terapathalic Acid (PTA) or Mono
ethylene Glycol (MEG)

b. Players:

 Garware Polyester was the first to set-up a unit in 1981

 Major players in this sector are Garware Polyester, Polyplex Corporation,
 Ester Industries, Venlon Polyester, Siltap Chemicals, Jindal Polyester, Jalpac India,
Amco Vinyl, etc

4. Laminate Tubes :

a. Industry :-

1. Market around Rs. 750 crs. (US $ 175 mn.).

2. Tubes are of two types - laminate tube and seamless tube.
3. Laminate tube comprises of 5 layer printed laminate where as a seamless tube body
comprises mono or multi layered extruded.
4. Seamless tubes (no seam in the tube) was first introduced in 1996.
5. Properties of these tubes can be varied by using a variety of polymers - HDPE,
LDPE, HMHDPE, etc.
6. Popularly used in cosmetic, dentrifice, pharmaceuticals, etc.

b. Players

 Sector dominated by Essel Packaging.

 Others - Paper Products; Akar Laminates .

19
 3. 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.

 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 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.

 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 (usually laminated with
high-density PE), 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.

20
 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. Plastic boxes are mainly used for transporting goods and are reusable.
They can be stacked, folded when empty to save storage space and recycled.

 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:
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.

21
 4. FUNCTIONS OF PACKAGING

1. 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. The packaging must furthermore as far as possible prevent
any contamination, damage or other negative impact upon the environment and
goods.

2. 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.
22
3. 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.

4. 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).

5. 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 legislative requirements which demand that goods be clearly marked with
details indicating their nature, composition, weight, and quantity and storage life.

23
 5. PACKAGING 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 as a way to convey the product or
recycle tired images and product packaging that doesn't work.

Rank these attributes for your product and then the nearest competitive product or
a product that you recently purchased that was outside your normal buying pattern.

 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 ?
 Does it inspire consumer trust and loyalty ?
 Is it safe and secure ?
 Does it compel you to want to know more ?
 So how does your product stack up in solving a consumer want or need ?
 Would your package make someone desire to take a closer look ?

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.

24
.

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. 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 because they identify with the brand.

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. 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 effect
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, descriptions and graphics must be
clear.

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.
 25

6. WASTE MANAGEMENT OF MATERIAL

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 packaging process, the logistics system, waste
management, etc.

 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. Usually, the energy content and
material usage of the product packaged are much greater than that of the package.

 Minimization :
The mass and volume of packaging 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 for closed loop logistics systems. Inspection,
cleaning, repair are often needed. Some manufacturers re-use the packaging of the
incoming parts for a product as packaging for the outgoing product.

 Recycling :
Recycling is the reprocessing of materials 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 emissions and ash from incineration. Packages should not be
littered.

26
 7. 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. Global leaders in the FMCG segment are Sara Lee, Nestlé,
Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex,
General Mills, Pepsi and Mars etc.

Performance :
In India, the FMCG industry is the fourth largest sector with a total (organized)
market size of over US$15 billion, as per ASSOCHAM, and can be classified under
the premium and popular segments. The premium segment (~25%) caters mostly to
the higher/upper middle income consumers while the price sensitive popular or mass
segment (~75%) consists of consumers belonging mainly to the semi-urban or rural
areas that are not, and cannot afford to be, brand conscious.

The market growth over the past 5 years has been phenomenal, primarily due to
consumer’s growing disposable income which is directly linked to an increased
demand for FMCG goods and services. Indeed, it is widely acknowledged that the
large young population in the rural and semi-urban regions is driving demand
growth, with the continuous rise in their disposable income, life style, food habits
etc. On the supply side, the wide availability of raw materials, vast agricultural
produce, low cost of labor and increased organized retail have helped the
competitiveness of players.
According to the recent reports by Zeus Consulting, India's FMCG industry has so
far been resilient to the slowdown in the economy and a dip in consumer.

27
FMCG eyes 15% growth this year :
The Rs. 96,000 crore FMCG industry is expected to witness a lot of action in 2012.
With the economy showing signs of revival, the industry is expected to register a
15% growth in 2012 as compared to the previous year.
Despite the rise in input costs, FMCG industry is likely to sustain its robust growth
momentum aided by increased rural incomes, taxation benefits and gradual shift
from the unorganized sector/regional players.
Scope of the Sector :
The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest
sector in the economy. A well-established distribution network, intense competition
between the organized and unorganized segments characterizes the sector. FMCG
Sector is expected to grow by over 60% by 2010. That will translate into an annual
growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise
from around Rs. 56,500 crores in 2005 to Rs 1,00,000 crores in 2014.

28
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:

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.

29
 8. 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:
1. Low operational costs
2. Presence of established distribution networks in both urban and rural areas
3. Presence of well-known brands in FMCG sector
 Weaknesses:
1. Lower scope of investing in technology and achieving economies of scale,
especiallyin small sectors.
2. Low exports levels.

 Opportunities:
1. Untapped rural market
2. Rising income levels i.e. increase in purchasing power of consumers
3. Large domestic market- a population of over one billion.
4. Export potential
5. High consumer goods spending

 Threats:
1. Removal of import restrictions resulting in replacing of domestic brands
2. Slowdown in rural demand
3. Tax and regulatory structure

30
FMCG PRODUCT LINE
31
 9. ROLE OF PACKAGING IN FMCG PRODUCTS

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

is growing in competitive markets for packaged FMCG products. This research
utilized a focus group methodology to understand consumer behavior toward such
products. The challenge for researchers is to integrate packaging into an effective
purchasing decision model, by understanding Consumer‘s behavior towards the
packaging of FMCG products.
Packages also deliver brand identification and label information like usage
instructions, contents, list of ingredients or raw materials, warnings for use and
directives for care of product.

“Packaging is the container for a product - encompassing the physical appearance of

the container and including the design, color, shape, labeling and materials used”

Packaging has a huge role to play in the positioning of products. Package design
shapes consumer perceptions and can be the determining factor in point-of-
purchase decisions which characterize the majority of shopping occasions.
In recent years the marketing environment has become increasingly complex and
competitive. A product‘s has strong potential to engage the majority of the target
market. This makes it an extremely powerful and unique tool in the modern
marketing environment.

Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods
(CPG), are products that are sold quickly at relatively low cost. Though the absolute
profit made on FMCG products is relatively small, they generally sell in large
quantities, so the cumulative profit on such products can be large.

32
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.

Some of the best known examples of Fast Moving Consumer Goods companies
include:

Nestlé, Hindustan Unilever, Procter & Gamble, Coca-Cola, Pepsi, Wilkinson and
Mars.

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.
33
The Relevance of Packaging as a Marketing Tool:

Never underestimate the importance of packaging. The way that consumers react to
unbranded products that packaging plays a huge role in reinforcing consumer
perceptions. Packaging helps to drive the way consumers experience a product. Yet,
we spend little time researching the connections between packaging and the direct
experience of the product. What relevance does packaging have in the marketing
world of today?

Reaching the target market :

In recent years the marketing environment has become increasingly complex and
competitive. Although advertising can be a highly effective, reaching the entire target
market for most products is generally not a feasible prospect. Media fragmentation
has meant that it is becoming increasingly difficult and expensive to reach and
communicate with customers and potential customers, forcing marketers to adopt
more innovative means of reaching their target market.

Winning at the First and Second Moment of Truth:

Packaging‘s dual role is what makes it a truly unique marketing tool. The packaging
has to provide consumers with the right cues and clues - both at the point of purchase
and during usage.
1. The first moment of truth is about obtaining customers attention and
communicating the benefits of the offer.
2. The second moment of truth is about providing the tools the customer needs to
experience the benefits when using the product.
34
 1. The Point Of Sale :- The 1st Moment Of Truth
The importance of making an impact at the point of sale cannot be underestimated. A
recent Point of Purchase Advertising Institute (POPAI) survey in the UK found that
over 70% of all purchasing decisions are made in-store at the point of purchase.

a. Cutting through the clutter - actually getting the consumer to notice/see the
product
b. Communicating marketing information
c. Stimulating or creating brand impressions
d. Providing various brand cues :
 Value
 Quality
 Safety

The most brilliant and creative packaging is useless unless it is seen. Creating a
powerful shelf presence so that the brand stands out from the crowd and is actually
noticed is the first and most vital step for any product on a shelf.
What this fact illustrates is that today‘s consumers have to sift through a vast amount
of products to choose what they want and not surprisingly they end up ignoring most
of what they pass. To generate initial consideration, two things are key :-

i. Shelf placement - ensuring that your product is placed on the shelf in the area most
likely to be seen by customers.
ii. Packaging that creates a visual contrast

35
2. Usage :- The 2nd Moment of Truth
Unlike advertising exposure which can be relatively brief, packaging continues to
build brand values during the extended usage of the product and can drive brand
equity and loyalty.

After purchase, packaging plays both a functional and a marketing role.

i. Functional Role :
From a functional perspective, packaging is often part of the usage/consumption
experience not only is it a means of providing any necessary information, but it can
also form part of the actual product and provides functional benefits. If packaging is
unwieldy it can hamper the relationship with the brand.
For instance if it breaks easily, doesn‘t fit in the fridge, can cut the consumer, etc., the
experience with the product can be negative.

ii. Marketing Role - Brand Identity and Differentiation :

As the only part of the marketing communication that the consumer takes home,
Packaging plays a key role in communicating and reinforcing brand values over
time. Packaging has the power to make, but also to break brand relationships.
Although a non-favorable advertisement might be quickly forgotten, poor packaging
provides a continual reminder of the brand‘s perceived failing. Likewise, favorable
packaging can be a means of continually reinforcing the brand‘s appeal.

36
 10. FACTORS INFLUENCING PACKAGING DECISIONS

Packaging decisions are important for several reasons including:

1. Protection :
Packaging is used to protect the product from damage during shipping and handling,
and to lessen spoilage if the product is exposed to air or other elements.

2. Visibility :
Packaging design is used to capture customer’s attention as they are shopping or
glancing through a catalog or website. This is particularly important for customers
who are not familiar with the product. Packaging designs that standout are more likely
to be remembered on future shopping trips.

3. Added Value :
Packaging design and structure can add value to a product. For instance, benefits can
be obtained from package structures that make the product easier to use while stylistic
designs can make the product more attractive to display in the customer‘s home.

4. Distributor Acceptance :
Packaging decisions must not only be accepted by the final customer, they may also
have to be accepted by distributors who sell the product for the supplier. A retailer
may not accept packages unless they conform to requirements they have for storing
products on their shelves.

5. Cost :
Packaging can represent a significant portion of a product‘s selling price. Developing
new packaging can be extremely expensive. Smart packaging decisions can help
reduce costs and possibly lead to higher profits.

6. Long Term Decision:

When companies create a new package it is most often with the intention of having
the design for an extended period of time. Changing a product‘s packaging
frequently can have negative effects since customers may be confused if the design is
altered.

7. Environmental or Legal Issues:

Packaging decisions must also include an assessment of its environmental impact.
Packages that are not easily bio-degradable could draw customer and possibly
governmental concern. Also, caution must be exercised in order to create packages
that do not infringe on intellectual property, such as copyrights, trademarks or
patents, held by others.
37
 11. PACKAGING EXPENDITURE

Packaging is often criticized on the grounds of cost and of being a waster of natural
resources and energy.

The food packaging industry has always been anxious to conserve resources due to
economic pressures. This has been achieved by using less packaging material, or by
turning to cheaper, more abundant materials. In addition, recycling and package
reuse/refilling schemes have been introduced voluntarily to save materials and
energy and to protect the environment.

Prices of packaging materials such as aluminum foil, Kraft paper, and adhesives for
corrugated boxes and packaging plastics have increased up to 25% forcing
companies such as Marico and Dabur to talk price hike in a marketplace where
increasing prices and cutting advertising spends could prove fatal.

FMCG companies, working with extremely low margins after absorbing most of last
year‘s rise in raw material prices and higher logistics costs due to fuel price
hike, are also exploring innovation in packaging and hedging materials to retain
profitability.

Packaging costs typically account of 8-10% of the total costs in a FMCG

company.Increase in packaging costs has put pressure on FMCG companies which
are
already working with low margins. Prices of packaging materials such as Kraft
paper, adhesives for corrugated boxes, aluminum foil and packaging plastics have
increasedThis has put pressure on companies to either increase the price of processed
food and some other products or to absorb the cost which would affect their margins.

38
12. PACKAGING AS A MEDIUM TO INCREASE SALES

“Catching consumer’s attention is the first step in making the sale”

Packaging plays an important role as a medium in the marketing mix, in promotion

campaigns, as a pricing criterion, in defining the character of new products, as a
setter of trends and as an instrument to create brand identity and shelf impact in all
product groups.

The top ten requests about packaging :-

Good starting points for improvements, changes, innovations which optimize the
features of packaging that determine buying decisions and thus generate new market
potential can be summarized in consumer's top ten requests about product packaging :

1. Eye-catching appearance :-
A distinctive, unmistakable and eye-catching appearance is a signal at the POS to
which all consumers and particularly the younger ones respond positively. Whatever
stands out clearly in the monotonous competitive environment, whatever is
surprising scores points with the consumer.

2. Design, shape and color :-

The purpose of well-considered design, creative printing and finishing is to entice the
consumer to devote attention to the pack and its contents at the POS. Aesthetics and
attractiveness are major distinctive features and are in fact essential in some product
segments, beautiful packaging design is of central importance Consumers like to buy
agreeably designed and decorative products.

3. Functionality :-
Functional aspects are the basis for all successful packaging and for thus greater
product success too. Product and aroma protection, hygiene and tightness,
environmental responsibility and practical handling in both use and storage are
important here
 39

4. Innovation :-
Novelty has exceptionally strong appeal. An innovative pack can even make "new
products" out of familiar ones. Unusual solutions, functional new developments and
originality not only set design trends but also boost sales.

Material :-
What is printed on board is read particularly willingly, while what is packaged in
board sells particularly well. Sustainability, easy disposal and, great design variety
are particular features of the material.

6. Efficient communication :-
The packaging is the credible medium at the point of sale and is consulted willingly
and intensively. This makes it an efficient means of communication. If several of his
senses are appealed to as well, he can be persuaded particularly successfully.

7. Multisensory appeal :-
Anyone who approaches consumers via several of his senses attracts greater
attention, intensifies perception and stimulates interest in buying. Packaging that can
be felt, smelled and heard as well as looked at wins the customer's favour. So much
so that he is willing to pay a higher price for this multisensory appeal.

8. Appropriateness :-
For the product Packaging is considered to be an important indicator of quality. The
quality of the product therefore has to be communicated by good packaging and not
just by promises of quality made in the text on the packaging. A credible "overall
work of art" is created as a result, in which the contents and the packaging are
coherent and the consumer is convinced by their consistency.

9. Value Packaging :-
It is an excellent way to communicate sophistication, class and value. This makes it
an ideal strategic option for expressing premium positioning as well as being the
instrument of choice when a product needs to be upgraded or a brand needs to be
revitalized. Products in classy packaging are particularly popular presents too.

10. Additional benefits :-

Successful packaging not only combines what is pleasant with what is functionally
useful but also provides additional benefits. For example, as a gift or for presentation,
with entertaining components or simply by making it possible to continue using the
 40

Increase Sales with Functional Packaging:

The next time you buy a product, consider the work that goes into its
packaging. There are several aspects that make up the packaging, but often
consumers do not realize the amount of thought that goes into the design,
manufacture, and role it plays in marketing.

Prior to the advent of the modern supermarket and department store, manufacturers
shipped merchandise in bulk containers such as barrels, sacks, and tubs. Retail
merchants repacked the contents into smaller, more convenient packs to meet
customer needs. With the growth of mass merchandising and self-service,
manufacturers realized the value of packaging as a marketing tool. Today, it is a
vital part of a firm's product-development strategy; a package may even be an
integral part of product itself, for instance, the aerosol spray can for insecticide.

The Changing Role of Packaging:

Product packaging has evolved in its role in marketing strategy. For many years,
packaging received little, if any consideration as part of the product. It merely
provided a storage function. Then, when marketers understood that brand
associations related to packaging are held by consumers. Thus, packaging became
part of brand building efforts, with notable examples being Coke's contour bottle.

Today, packaging takes on an even more prominent role and can actually be a point
of differentiation. Packaging can enable product use in different situations product
easier to use (e.g. Heinz ketchup in bottles designed for refrigerator doors), or shape
a brand image that can command a price premium.
41
The Importance of Packaging:

Packaging is a very important marketing strategy to glamorize your product in order

to attract the consumer‘s attention. Sometimes packaging is so important that it cost
more than the product itself in order to lure the consumers to buy it. Packaging
should definitely be included in the 4 major P‘s of marketing. Most consumers judge
a product by its packaging before buying. So it is logical to say attractive packaging
is crucial in order to get the first time buyers to buy your products. Without attractive
packaging, who would buy it in order to try it? Your first step to enter the market is
crushed if the packaging is ugly. Converting first time buyers into loyal customers
should be the main goal of your business and packaging is the door to it.

Role of packaging on consumer buying behavior:

I have no doubt whatsoever that packaging influences consumer behaviour. The

question, however, asks whether the degree to which packaging influences consumer
behaviour is significant. This makes for a more interesting debate.
If we consider packaging as a communications medium, which we surely must as
companies spend as much money developing innovative new packaging solutions as
they do on many other elements of the marketing mix, in order for it to be successful
it must deliver on both a functional and an emotional level. Content without
creativity is just plain boring, but creativity in the absence of content is simply noise.
Given the choice of two options, one with an easy-to-open, re-sealable container, the
other that takes 10 minutes and a tool box to extract the product, I know which one I'd
go with. On a simpler level, the physical state of packaging influences our buying
behavior.

If we are looking to purchase an unfamiliar product, packaging can play an important

role - what information does the packaging contain, in what language? A lack of
familiarity with a product leads to an increased level of risk associated with the
purchase - clearly labeled contents with an image of the contents can help offset the
risk.

42
 CASE STUDY :

Bru : Happiness Begins with Bru

Brand : Bru
Company : Hindustan Unilever
Bru is a power brand from the HUL's stable. A brand which pioneered the instant
coffee category in Indian market in 1969 is also an example of many successful
marketing practices. According to HUL. Bru is the market leader in coffee segment
with a value share of 46.9 %.
HLL decided to phase out Dilkush and Cafe brands. It then consolidated the coffee
brands under the Masterbrand Bru.

Bru before becoming the family brand was positioned as a coffee that tasted just like
filter coffee. But after the elevation to master brand, Bru took the positioning around
happiness.
Bru was synonymous for instant coffee and had an astounding 21% market share in
the first year of launch itself. All these years, the brand has been fighting for the
numerous positions with Nestle whose iconic Nescafe brand was the market leader.
But in 2008, the brand pushed Nescafe to the second position.

The Success factor is:

1. Innovation in Product

2. Innovation in Packaging

3. Aggressive Advertisements

Nestle lost out because of lethargy. The company failed to consistently invest in its
Nescafe brand.
HUL's marketing acumen is vivid in the rise of Bru as the market leader. It has
never stopped innovating for this new brand.
Bru was able to give new offerings to customers on a regular basis. One of the
successful new products was the cappuccino packs. The new flavor gave the brand a
new thrust in the market. The new flavors even prompted hardcore tea lovers to try
out these flavors. The best part was that these cappuccino was available in single
serve sachets which prompted consumers to test the flavors.

Another innovation was the cold coffee. Bru launched the cold coffee variants which
again captured the attention of the consumers. The coffee section is full of various
flavors and packs of Bru which itself creates a positive vibration for the brand.
 43

Bru is positioned on the theme of happiness. The brand has the tagline “Happiness
begins with Bru ". The positioning and communication has been consistent with the
brand's promise of kick starting one's day with a Bru.

For the Bru Cappuccino, it had roped in the Bollywood Director Karan Johar to
endorse the brand.
Another critical factor that aided Bru's success was the innovation in packaging.
The brand made the entry barrier low by launching small affordable SKUs. There
are single serve and large packs at different price points making the brand
affordable.

Recently the brand has yet again come out with a customer centric innovation in
the form of a flavor lock. Most of the customers worry about losing the flavor of
coffee powder once the pack is cut open. The flavor lock is a plastic clip which
will lock the flavor from escaping. More than actually locking the flavor, the lock
gives a psychological belief that the flavor will not be lost.

This little plastic lock also gives more convenience to the home maker. Typically
when buying powders in packs home makers have to transfer the powder to a
container to preserve it for long. This lock effectively eliminates the need for such a
container.

Bru is a brand which has reached the commanding position following

methodologically all the critical elements for marketing success : customer centric
innovation, aggression and new product development.
44
 13. TRENDS IN PACKAGING
Consumers' tastes and preferences are changing rapidly, whilst consumption patterns
are seeing a radical shift. As a result, marketers have to respond to this changing
environment. Innovation in product packaging is central as they offer benefits
beyond just being a medium to withstand storage and distribution challenges. Riding
on the rapid shift in consumer graphics and spectrum in India, food packaging
emerged as the new value differentiator for the FMCG companies in India.
In the last couple of years, Indian FMCG sector has been marked with receding
margins on the back of steep increase in the input prices as well as aggressive price
competition at the retailing front.
Consumers have become more informed, discerning and price sensitive. Their
lifestyle transformed and lifestages have become much more complex and
overlapping. As consumers have become more mobile and crunched for time, they
have started seeking a number of auxiliary benefits such as convenience of
consumption and usage.
The 'Great Indian Retail Revolution', initiated at the break of the current century, has
gained momentum all along the first decade. The organized retailing industry in India
is at the threshold of mass adoption. The advent of organized retailing has also
brought about the 'shelf war' amongst the FMCG manufacturers.

India is seen somewhere at the middle of the evolution stage in terms of food
packaging when compared with the developed economies such as Japan, Germany
and the US.
Data monitor analyzed the global scenario in the past one year to assess various
packaging trends across the globe. Their analysis revealed four prominent trends
driving the packaging innovations :-
a) convenience of usage
b) freshness and improved shelf life
c) sustainable and environment-friendly
d) packaging as a tool to position and promotes the brand.

45
Data monitor predicts a multi-dimensional shift in food packaging in India in the next
five years. Advanced packaging techniques and concepts such as aseptic packaging
and retort-able packages, although coming into existence, are yet to make a mark in
India.
However, with the consistent rise in the adoption of 'Ready to Eat/Drink' products
amongst Indian consumers, it is expected to be only a matter of time before Indian
FMCG market would be filled with products using advanced packaging technologies,
primarily aimed at enhancing the shelf life of the products and to offer additional
convenience to the consumers in terms of storage, consumption and portioning.
Traditionally, product packaging has not been seen as a vehicle to promote the brand
while it is changing now. For example Kissan Jams, targeted at the kids segment, is
now using tube packages with catchy graphics to appeal the target audience.

46
Packaging Trend: The Future Outlook
The packaging industry is going under transformation almost everyday and new
technologies that are better than before are taking their place. Consumer behavior,
product demand and the current level of global warming are all going to have a direct
impact on the future of packaging The future of the packaging market is certainly
looking bright. Following are some of the key trends that if implemented are going to
keep this industry on its prime :-

The Convenience for Society:

Convenience seem to have emerged as an important characteristic in life of the
people. Various changes in the societal outlook viz, structure of the family, number
of working women rising, longer working hours and increase in commuting time,
have also contributed to the need for convenience. Thus, the need for those kind of
packaging, that enables the adult as well as children to open them, has risen. Also the
future will see a great rise in the kind of packaging that allows one to indulge in
multitasking,

Health and Nutrition:

With the people becoming more and more cognizant about their health viz obesity,
low carbohydrate, less fat etc. , the manufacturers are deemed to introduce packaging
that delivers the various information regarding the product in a convenient, easy to
read manner.

Green Trends:
With the rate of green house emissions touching the skies, there is an urgent need
to change the packaging trends that have been followed. The fact that even the people
have become more sensitive towards the need of green technology, will surely helped
in making the future of packaging more eco friendly.

47
 14. CASE STUDY : COCA COLA

Introduction:

As the world's largest manufacturer, distributor, and marketer of nonalcoholic

beverage concentrates and syrups, operating in more than 200 countries, the firm
supplies many products in addition to its flagship brand. These include fruit-based
and other carbonated beverages tailored to local tastes as well as newer variants of
the main brand, such as Diet, Cherry, and Vanilla Coke. Although carbonated
beverages represented 85 percent of worldwide sales volume in 2002, increased
market share for the Coke products Dasani bottled water, PowerAde sports drink, and
Minute Maid orange juice have demonstrated growth in the noncarbonated sector.

History of Coca Cola:

Coca Cola, re-branded India in 1993, after having withdrawn from the country in the
late 1970‘s in the wake of Foreign Exchange Regulation Act (FERA) of 1973. India
has the world‘s largest middle class, secondly to China. Coca cola cited this as an
opportunity. Coca Cola was the leading Soft drink brand in India Coke‘s acquisition
of local popular Indian brand including Thumps up Maaza, Citra, and Gold spot
provided not only physical manufacturing, bottling and distribution asset but also
strong consumer preference. In 2000 the company launched the Kinley water brand
and in 2001 Shock energy drink.

48
 Branding and Packaging of Coca Cola

Branding:

From the Three A‟s to the Three P‟s

Coca-Cola used to focus its strategy on the three A‘s: availability, acceptability, and
affordability. While these provided for tremendous growth, they also led to lowered
entry barriers. Today, Coca-Cola‘s mantra is the three P‘s: preference, pervasive
penetration, and price-related value.

The Power of Brand Accessibility

If you were another soft drink company, you might define your competitive frame of
reference as the cola market or the soft drink market or even the beverage market.
But Coke thinks of its business and its market share in terms of share of human liquid
consumption. This makes water a competitor.

Coca-Cola is Serious about Brand Building

Each month, Coca-Cola tests 20 brand attributes with 4,000 consumers to measure
movement. The company also compensates (bonus and other compensation
components) a large portion of its senior managers based on brand preference.

One Final Coca-Cola Fact

A recent Coca-Cola annual report reported that the second most recognized
expression in the world after “OK” is “Coca-Cola”

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Packaging:
The Coca-Cola bottle is probably the most easily recognized containers in the
world. It was described by the 'Pop' artist Andy Warhol as, the 'design icon of the
decade'. The smooth, organically shaped bottle was originally conceived in the early
1900's. It was a time when both the packaging and the actual Coca-Cola product was
being imitated.

In response to this the company, in 1916 set a brief , which was to find: 'A CocaCola
bottle which a person will recognize as a Coca-Cola bottle even if he feels it in the
dark. The Coca-Cola bottle should be shaped that, even if broken, one could tell at a
glance what it was'. The bottle shown below is the 192ml size bottle. It is still sold in
many countries throughout the world today. The bottle design was re-launched in
Britain as recently as 1997. Coca-Cola conducted research which confirmed that
consumers still preferred to drink Coca-Cola from a glass bottle.

Bottling/Packaging Trends of Coca Cola:

Coca-Cola® originated as a soda fountain beverage in 1886 selling for five cents a
glass. Early growth was impressive, but it was only when a strong bottling system
developed that Coca-Cola became the world-famous brand it is today.
The Coca-Cola bottling system grew up with roots deeply planted in local
communities. This heritage serves the Company well today as people seek brands
that honor local identity and the distinctiveness of local markets. As was true a
century ago, strong locally based relationships between Coca-Cola bottlers,
customers and communities are the foundation on which the entire business grows.

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 15. SURVEY ON : CONSUMER BEHAVIOR
TOWARDS PACKAGING OF FMCG PRODUCTS

51
 Formulating the Research Problem:

“Understanding Consumer Behavior towards

the Packaging of FMCG products”

Objective of the Study:

 Important attribute in our research Convenience, Materials, Aesthetic,

Information.

 To find out these Attributes affect Consumer Behavior Significantly.

 Is there any significant difference between the Variables as there is change in

Products?

 To find out the Consumer Attitude towards the new Packaging of Preserved
Products.

 Is Packaging Influence Consumer to switch from one to another Brand?

 52

Significance of the Study :

The aim of this survey is to find the role of packaging on consumer buying
behavior. The basic purpose of behind it is to find out how such factors act behind
the success of packaging. According to this research I try to find the positive
relationship between independent variable and dependent variables. For collecting
the data I will use the questionnaire.

The significance of the study, its delimitation and limitations are discussed. The
consumer buying behavior is dependent variable. The packaging is the most
important factor. Packaging elements like Packaging color. Background Image,
Packaging Material, Font Style, Design of wrapper, Printed Information and
Innovation is taken as predictors.

Due to increasing self-service and changing consumer’s lifestyle the interest in

package as a tool of sales promotion and stimulator of impulsive buying behavior is
growing increasingly. So package performs an important role in marketing
communications, especially in the point of sale and could be treated as one of the
most important factors influencing consumer‘s purchase decision.

Literature analysis on question under investigation has shown that there is no

agreement on classification of package elements as well as on research methods of
package impact on consumer‘s purchase decision.

By this article we seek to reveal elements of package having the ultimate effect on
consumer choice. Taking into consideration that package could be treated as a set of
various elements communicating different messages to a consumer; the
research model was developed and tested in order to reveal impact of visual and
verbal package elements on consumer‘s purchase decisions.

Methodology:
The methodology for the survey on Consumer Behaviour towards Packaging of
FMCG Products is the Questionnaire method where in questionnaire are answered by
100 respondents of 4 age groups.

53
 Sample Design:

The sample design for the survey is classified according to the age; total 100
respondents are selected for the survey out of which 25 respondents are selected from
each age group.

Age Groups Respondents

15-21 25

21-35 25

35-50 25

50+ 25

Pie-representation:

54
 16. Questionnaire Analysis and Research
Findings

1. Does packet of a product influence your buying behaviour?

Yes No Sometimes

Response :

 Tabular representation:

Age Group Yes No Sometimes

15-21 22 0 3

21-35 23 0 2

35-50 18 5 2

50+ 13 10 2

 Description:

From the above results we can say that there is a high degree of impact of packaging
on consumer behaviour. Out of the 100 respondents 76 says that they get influenced
by the packaging of the product. The packaging have a greater impact on the age
group of 15- 21 and 21-35. However the rest of the higher age group sometime‘s
tends to change the product due to packaging

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 Bar Diagram:

56
2. What is your priority towards packaging?

Protective Packing Eco- Friendly Packing

Attractive Packing All of Above

Response :

 Tabular representation:

Age Group Protective Eco- Friendly Attractive All of the

Packing Packing Packaging above

15-21 3 4 13 5

21-35 3 5 8 9

35-50 8 5 5 7

50+ 6 7 2 10

 Description :

A consumer wants that packaging of the product should be a mixture of a matrial that
should be eco-friendly and the main aim of packaging should be the protection of the
inner goods.

The age group between 15-21 wants that particular product packaign shoud be
attractive

The age group between 21-35 wants attractive as well a sence of environement is
there in these group because of which they demand for a eco-friendly packaging.

The age group between 35-50 and above 50 wants a mixture of all the factors and
have lesser say on attractive packaging and have a focus on the protection that
packaging should provide them.

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 Bar Diagram:

58
3. Do you switch your brand due to change in packaging of existing
brand?

Yes No Sometime‘s

Response:

 Tabular representation:

Age Group Yes No Sometime‘s

15-21 8 5 12

21-35 5 6 14

35-50 3 11 11

50+ 4 13 8

 Description:

There is a lesser degree of a consumer to change their brand due to change in the
packaging of the existing products.

In the age group of 15 -21 these factor has relatively higher impact, these age group
people tends to change their brand if they find change in the packaging of their
existing brand and can switch to other brands which have attractive packaging.

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 Bar Diagram:

60
4. Which of the following aesthetic factor attracts you towards the
purchase of the product?

Color Shape & Text & Graphics

Size

Response:

 Tabular representation:

Age Group Colors Shape & Size Text & Graphics

15-21 11 8 6

21-35 8 9 8

35-50 5 15 5

50+ 6 11 8

 Bar Diagram:

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5. Select the parameter of packaging due to which you prefer to buy the product?

Convenience Material Use Aesthetic (color, shape, Information

size)

Response:

 Tabular representation:

Age Group Convenience Material Use Aesthetic (color, Information

shape, size)

15-21 3 7 12 3

21-35 5 5 7 8

35-50 8 5 4 8

50+ 10 6 3 6

 Description :
While framing a packaging strategy these question should be addressed by the
management of the organization. These factor or parameters add on to the marketing
competitive edge for the products.
Different Age group have there likings and have different taste, the age group of 15 -
21 wants that a packet should be attractive through its color, shape and size.

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 Bar Diagram:

63
 RECOMMENDATIONS

 Brand is important and its strategy is in consideration in the units. 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 pay attention for good packaging. 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.

 Consumer new product manufacturers mostly use the label in their products.
Basically they describe that made it, where it was made, when it was made, what
it contains, how to use it etc. Further they believe that the consumers are
properly guided by label to use the products. The information given in the label and
its value have to be highlighted while promoting the product in the market. It must
also be more useful technically.

 I do believe that culture difference does have an impact on company’s initiatives to

design the product package, for instance, during our research; the choices of
packaging colors are quite different between the West and Far East. Thus, we think
that it is important for international companies to take a consideration of culture
differences when they design the product package.

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 17. CONCLUSION

Results of research on role of packaging on consumer‘s buying behavior stipulated

following conclusions:

 Package could be treated as one of most valuable tool in today‘s marketing

communications, necessitating more detail analysis of its elements and an impact
of those elements on consumers buying behavior.

 Appropriate and vivid picture or packaging color which delivers them a

happy feeling, or an easy handle/open/dose/dispose package shape. All these elements
contribute each important effort to catch consumer’s attention and interest. Besides
each element’s single function, we think that a good combination of those elements
may let the product more eye-catching and attractive.

 The impact of package and its elements on consumer‘s purchase decision can be
revealed by analyzing an importance of its separate elements for consumer‘s
choice. For this purpose main package‘s elements could be identified: graphic,
color, size, form, and material of packaging are considered, wrapper design,
printed information, innovation while product information, producer, country-of-
origin and brand are considered as important ones. Moreover, the impact of
package elements on consumers purchase decisions should be evaluated depending
on the consumer‘s involvement level, time pressure or individual characteristics of
consumers.

 Empirically testing the research model proposed, package elements having the
ultimate effect on consumer choice in a case of different products from group of
convenience goods were determined:

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 It has revealed that elements of package are the most important for
consumer‘s purchase decision. For a major part of consumer’s a size and material
are the main visual elements, while product information is also the main verbal
elements when purchasing milk and washing-powder.

 Results of analyzing the impact of package elements on consumers purchase

decisions depending on level of involvement correspond with those of theoretical
studies and let us stating that visual elements of package have relatively stronger
influence on consumer‘s purchasing when they are in the level of low involvement,
in opposite to those who are in the level of high involvement.

 Packaging has a better reach than advertising does, and can set a brand apart from
its competitors. It promotes and reinforces the purchase decision not only at the
point of purchase, but also every time the product is used. Packaging in
different serving sizes can extend a product into new target markets or help to
overcome cost barriers. Packaging can even drive the brand choice (especially in
the context of children‘s products).

 Research into packaging has found that different packaging cues impact how
a product is perceived. Often the packaging is perceived to be part of the
product and it can be difficult for consumers to separate the two (the concept
of gestalt). Aspects such as packaging color, typography, illustrations and
graphics can influence how a product is perceived.

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 According to my research, I found out that most consumers like the product
quality after they purchased their desired packaged products. Based on those facts,
we can not say there is a 100% equal relationship between good package and
good product quality, but there is a positive thinking and trend about well-designed
package shows high product quality. As a matter of fact, people are becoming more
and more demanding; packaging has been gradually shown his important role in
a way to serving consumer by providing information and delivering
functions. With its different functionality to ease and to communicate with
consumers, there is no doubt about increasingly important role of packaging as a
strategic tool to attract consumers‘ attention and their perception on the product
quality.

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 18. Bibliography

Web Sites:
http://en.wikipedia.org/wiki/Packaging_and_labeling

http://www.indiapackagingshow.com/

http://packnomics.com/Where_s_The_Money_.html

http://www.indianmba.com/Faculty_Column/FC337/fc337.html

http://www.brandchannel.com/papers_review.asp?sp_id=1492

http://gdpackaging.wordpress.com/2010/03/01/introduction-to-packaging-design-article/

http://www.packagingtoday.com/

http://www.print-packaging.com/education.htm

http://www.cosmetic-packaging-manufacturers.com

http://www.wasteonline.org.uk/resources/InformationSheets/Packaging.htm

Books:

 Keller, K. L. (2003). Strategic brand management: Building, measuring and

managing brand equity, 2nd ed., Englewood Cliffs, NJ: Prentice-Hall.

 Kotler, Ph. (2003) Marketing management, 9th ed. Upper Saddle River:
Prentice-Hall.

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 19. Annexure
Questionnaire:

Survey on: “Consumer Behavior towards

Packaging of FMCG Products”
Name:

Age Group: 15-21 21-35 35-50 50+

Gender: Male Female

Occupation:

1. Does packaging of a product influence your buying behavior ?

Yes No Sometimes

2. What is your priority towards packaging?

Protective Packing Eco- Friendly Packing

Attractive Packing All of Above

3. Do you switch your brand due to change in packaging of existing brand ?

Yes No Sometimes

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4. Which of the following aesthetic factor attracts you towards the purchase of the product?

Color Shape & Size Text & Graphics

5. Select the parameter of packaging due to which you prefer to buy the product?

Convenience Material Use Aesthetic(color, shape, size) Information

70