1. PACKAGING Chapter 31.2 Marketing I

2. Packaging Package = the physical container or wrapping for a product. 10% of a product’s retail price is spent on developing, designing, and producing just the package!

3. Functions of Packaging 1. Promoting & Selling the Product 2. Defining Product Identity 3. Providing Information 4. Expressing Customer Needs 5. Ensuring Safe Use 6. Protecting the Product

4. 1.Promoting & Selling the Product Customer reaction to a product’s package is a very important factor! Positive brand name Attractive Colorful Visually appealing

5. 1.Promoting & Selling the Product Marketers may package or bundle two or more complimentary products in one package: Mixed bundling: the practice of packaging different products and services together. Example: shaving gel with razor Price bundling: when two or more similar products are placed on sale for one package price. Example: DVD’s packaged together for one low price

6. 2.Defining Product Identity Packages are often used to promote an image such as: Prestige Convenience Status

7. 3.Providing Information A package provides information for the customer. Many packages provide: Directions for using the product Information about using the product & contents Product guarantees Nutritional values Potential hazards

8. 4.Expressing Customer Needs Product packages usually come in various sizes to meet the needs of consumers. Family Packs Smaller packs for individuals

9. 5.Ensuring Safe Use A package can improve product safety. Glass packaging Plastic Tamper-resistant packaging Blisterpacks: packages with preformed plastic molds surrounding individual items arranged on a backing. Jars Sealed lids Childproof lids

10. 6.Protecting the Product A package must also protect a product during shipping, storage, and display. Package design should: Prevent or discourage tampering Prevent shoplifting Protect against breakage and spoilage

11. Contemporary Packaging Issues Product packaging offers companies ways: To incorporate technologies To address lifestyle changes To recognize environmental, social & political concerns PACKAGING ISSUES 1. Aseptic Packaging 2. Environmental Packaging 3. Cause Packaging

12. Aseptic Packaging Aseptic packaging = incorporates a technology that keeps food fresh without refrigeration for extended periods. Involves sterilizing the package & the food product. Filling & sealing the package in a sterile environment Examples: canning & bottling

13. Environmental Packaging Recent public opinion surveys show that: Americans support less wasteful packaging Americans are willing to pay more for products that reduce waste In response, companies are making more packages that are: Reusable Recyclable Safer for the environment

14. Cause Packaging Some companies use their packaging to promote social and political causes = cause packaging. Examples: Ben & Jerry’s Ice Cream – Rain Forests Hallmark Red 8% of sales go to Global Fund to help fight Aids in Africa Garth Brooks “Pink Edition” album $10/album go directly to the Susan G. Komen Breast Cancer Foundation

15. LABELING Chapter 31.2 Marketing I

16. Labeling Label = an information tag, wrapper, seal, or imprinted message that is attached to a product or its package. Main functions: Provide information & directions Protect businesses from legal liability Three kinds of labels: Brand label Descriptive label Grade label

17. Types of Labels Brand label = gives the brand name, trademark, or logo. Uncle Ben’s Rice Ben & Jerry’s Ice Cream Procter & Gamble’s Tide Detergent Pizza Hut Pizza Kraft Macaroni & Cheese

18. Types of Labels Descriptive label = gives information about the product’s use, construction, care, performance, and other features. Product illustrations Must represent what is in the package Weight statements Net weight of product minus packaging/liquid Dating & storage information “Packed on”, “Sell by”, and “Best if used by” & “Expiration” dates Ideal storage guidelines to ensure less waste and best quality Ingredients Product guarantees Manufacturer’s name, address, Web address Allows customers to complain or visit website

19. Types of Labels Grade label = states the quality of the product. Eggs: AA, A and B Corn & Wheat: 1 & 2 Canned Fruit: A, B & C Meat: Prime

20. Labeling Laws The Fair Packaging & Labeling Act (1996) Established mandatory labeling requirements and authorized the FDA and the FTC to establish packaging regulations. FDA = Food & Drug Administration FTC = Federal Trade Commission

21. Labeling Laws (FDA) The federal Nutrition Labeling & Education Act (passed 1990 – enacted ‘94) Protects consumers from deception labeling Requires nutritional information based on an overall daily diet Labels must clearly state: Calories, fat, carbohydrates, sodium, cholesterol, protein & % of daily calorie intake based on a 2,000 calorie diet Also regulates health claims & enforces consistent descriptive terms: Light and lite, free, low, reduced, good source of…

22. Labeling Laws (FDA) FDA also requires product health warnings Starting in 1989, all alcoholic beverages had to carry the following statement: “According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of birth defects.” “Consumption of alcoholic beverages impairs the ability to drive a car or operate machinery and may cause health problems. Similar warnings appear on cigarette packages

23. Labeling Laws (FTC) Responsible for monitoring advertising that is false or misleading 1992: Released guidelines for companies to follow when making environmental claims on product labels. “Recycled” = a company must show proof that it has retrieved or recovered a designated amount of scraps or materials from the waste stream. “Recyclable” = can only be used if the product or package can be re-used for a new product or package. “Ozone safe/Ozone friendly” = can be used only if the products do NOT contain any ozone-depleting chemicals. “Degradable”, “Biodegradable”, and “Photodegradable” = can be used only if the product will decompose into elements found in nature within a relatively short period of time after disposal.

24. Labeling Laws (USDA) The U.S. Department of Agriculture Issued legal standards and certification requirements for organic labels. The National Organic Rule Companies must reserve the words 100 percent organic and organic for use with foods that are produced without: hormones, antibiotics, herbicides, insecticides, chemicals, genetic modification, or germ-killing radiation. Country of Origin Labeling (COOL) Signed in 2002 – Effective 2006 Requires that a country of origin label be placed on all fruits, vegetables, peanuts, meats, and fish