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Apr, 01 2008

Smart packaging hikes sales

All of us cherish the gifts we receive. The very look of the glossy wrapping paper, ribbon and a bow adds a sentimental angle to the article inside the pack. The packaging adds value to the gift. Smart packaging draws the attention of a buyer by making i

Packaging has the magic button to push forward the brand image or to design its downside. It is `retail`s first moment of truth`. Beautiful packaging decks up the product. When it comes to looks, the customer is sure to buy the product that catches his eye at the first instant. And in this way packaging lends a cutting edge to your product thereby affecting its salability.

“Packaging is an art and a lot of science is involved in its designing and development. It takes a strategic role as a tool for business development and improved performance”, opines DM Khedkar, Joint Director, Indian Institute of Packaging (IIP). Rohit Khanna, Manager (Marketing), EC Packaging agrees with this when he says, “Packaging is the POP (point of purchase) of a product”.

The Importance of Packaging

A value-added service like free gift wrapping can increase sales to a great extent. Let`s take this case. A gift shop in the neighbourhood market offers free gift wrapping. This increases their sales by 5 per cent and brings more customers to their shop.

Packaging is your first salesperson, who speaks for your product. Many sellers face rejection on this account. The big `NO` stems from bad packaging despite the product being genuine.

“Packaging is an integral part of production, part of physical distribution and a tool for marketing. Its main function is to contain, preserve, protect, present and dispense. The ability of packaging is to provide more value and functionality using less resources. Each packaging would have to be more optimised and adopted to unique value chain and end user needs. Hence, considering all this, we can say that packaging is instrumental in increasing sales", explains Khedkar.

Various forms of packaging

Khedkar further elaborates: “There are different forms of packaging--- primary packaging, secondary packaging and tertiary packaging. Primary packaging is based on the product characteristics and compatibility of packaging material with the product. Different options ranging from glass, metal, paper, plastics and laminates are available in the market. The product has to be safe and secure throughout its period of life till it is consumed from the time of manufacture.
Secondary packaging is to take care of primarily packed product and is mainly focused on absorbance of various stresses during its journey from manufacturer to the consumer. It also gives an idea about storage instructions, handling practices and various hazards from which the product needs protection.

Tertiary packaging mainly includes information and conveniences for the use of the product. It may cover a set of instructions for making the product usable for the consumer. As we know, there are a number of mega trends like globalization, global population, demographic changes, increasing purchasing power, changing life style, urbanization, safety and sustainability. All these have resulted in innovative and functional packaging.”

Environmental issues

Packaging must be done keeping in mind the environmental and legal issues.Packages which are not easily bio-degradable could raise eyebrows of customers and the government concern. Also, packaging must be done keeping in mind things like copyrights, trademarks or patents of others.

The green packaging

The `green` factor in packaging is gaining acceptance nowadays. Because of conscious effort by the American Public Corporation, Wal-Mart announced that it would implement a new Sustainable Packaging Scorecard. The objective of this is to reduce packaging consumption by 5 per cent by 2013. Here comes the role of green packaging. It suggests using biodegradable polyesters in packaging material. According to Khedkar, “Indian retail industry is focusing on the issues associated with green packaging or sustainable packaging. However, there is a scope for improvement.” Khanna opines, “In India, the retail sector was not aware of green packaging. But nowadays with dissemination of information through print and electronic media, Indian retail sector is becoming conscious about sustainable packaging.” Growing awareness is there even among small entrepreneurs.

Packaging design

Packaging of products can be done in a number of ways depending on the nature of the product. Generally, packaging is done in bags, boxes, tins and bottles. However, the style of packaging depends on the product, how it is transported and stored. According to Khedkar, “Most of surveys indicate that the consumer makes buying decisions within 0.035 seconds. The product has to be unique and should have a different look/form so that it should be catchy. The package should also reflect the characteristics of the content.”

One should decide at first what type of packaging is matching to your products. Once you have decided, you can concentrate on its design. Your design should correspond to the sole purpose of communicating the benefits of your product, so that your competitors face a stiff competition from your style of marketing. Proper packaging through the selection of right colour, logos, shape and slogans helps build up brand image.

Packaging varies with purposes

Commenting on this particular issue, Khedkar analyses, “There are different types of products and their packages. The same product can be packed in different ways depending on the end-use requirement and the consumer conveniences.” He cites the example of milk which is packaged in different forms depending upon the time factor and the point when it will be consumed. Fresh milk can be distributed in cans, and pasteurized milk in polythene packs in which edibility remains till 72 hours.

He further says, “In all these forms, different pricing is involved for different modes of packaging. Pricing will always be associated with the segment of market where the product is going to be placed.”

Affects pricing of product

Pricing of your product reflects the cost involved to manufacture the product or service at a certain quantity and also the value a customer assigns to what you offer. Pricing differentiates your product from the rest of other products in the same line. Investment in packaging is proved to be worthwhile. Packaging is beneficial in many ways. A good packaging establishes quality, thereby giving less chance to its buyers to bargain for the price. It is smart packaging which gives edge to any product over others. A brand of the same quality may lag behind because of bad packaging.

Packaging designs

The unique business value that differentiates your product from the rest is known as business positioning. Packaging is meant to communicate the business positioning or unique set of values.For example, Lilliput`s showrooms are positioned as upscale and fashionable and for high-income shoppers. Their clothing boxes are expensive, stylist and unique. If we compare the packaging design of Lilliput`s with any other general store`s packaging, there is a huge gap. The general store may design some special bags in the festive season only, when the sale picks high. If these stores imitate the packaging design of Lilliput`s, that will be disadvantageous for their price-conscious target buyers.

Colours decide product positioning

Colour plays a vital role in packaging. Selecting colours for packaging of products is also very important as they play the role of defining product positioning. Colour red represents excitement, and it is also a noticeable colour in the shelf. The wine colour is used in Coke, Marlboro, and Folgers`s Coffee. All these products directly or indirectly promise stimulation, thrill and vigour. Colour blue and green signify calmness and serenity. Yellow is for bright mood and celebration. Orange is the colour of fire, black represents power, gold and silver express high value, white is for purity. So when you are choosing the packaging colour of your product, do consider these facts.

Commercial viability must

In spite of such an important role of packaging, there are points to be considered before deciding to go for it.
It has to be taken into account whether there is commercial viability in investing in quality packaging i. e. is there enough time for the salesperson in a gift shop to devote time for wrapping gifts for free while you are concerned that no customer is unattended. Lastly, in some cases customers, like e-buyers, prefer to see the actual product. Here, packaging doesn`t make much sense.

But the answer to all these lies in the results you get by packaging a product. When a small business owner has year-round increase in sales, and attractive packaging makes those festive seasons busier, then employing extra staff for packaging or wrapping is worth considering. The profits from packaging products will cover the expense of employing extra staff.

First impression

Packaging makes the first impression of your product. Hence, it should always be considered a part of production. Also, convenience makes packaging worthwhile in addition to value addition. It`s an effective selling tool provided it is used judiciously.

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