Multimedia Marketing/Marketing.iso/market/chapter5.8p

Text File | 1996-08-22 | 11KB | 268 lines

SECTION 5.8  Packaging Decisions

INSTRUCTIONS Answer this question: "What functions do packages accomplish for
marketers?" Then go into this section in search of answers.

EXAMPLE

Packages are a major determinant of what consumers buy. Numerous
blind tests have shown that consumers cannot distinguish between
their favorite soft drink and one that they refuse to drink (when
the identities of the drinks are concealed). To a large degree,
then, consumers are not buying products--they are buying packages.
If their favorite drink was in a different can or bottle, they
probably would not like it.

DETAILS

Developing a good physical product and brand name are necessary
steps in generating a strong product mix, but these do not
constitute the whole of product decision making. Marketers must
also pay close attention to packaging. Packaging costs for food
and beverages average about one-third of the value of the goods
they protect. Also the package may be one of the best selling
tools possessed by the company.

Packages can perform a number of functions. Packaging is more than
just the container. It is a system in which the product is the focal
point. In other words, a package can help cultivate a product's
worth to buyers.

There are a number of specialized packaging companies that aid
producers. These specialists are of value when the product needs
a new package for a test market. Also, specialists can package seasonal
products, eliminating the necessity for manufacturers to contend
with idle packaging equipment during the off-season. Finally, if
a new product is successful, the specialists can aid the marketer
in jumping into the national market with new packages before rivals do.

Cost considerations are important in packaging decisions. Generally,
the greater the extent to which the firm attempts to provide for
more functions, the larger the total packaging costs. Additional
costs constitute waste unless they are associated with a necessary
function.

PROBLEM 1

A producer of hose couplings for industrial buyers uses specialized
packaging companies. Which of the following is a major function
that these specialists perform?

A. Arranging for the delivery of packages to retailers.
B. Packaging seasonal products.
C. Working with wholesalers to develop optimum product mixes.
D. Setting price schedules with retailers.

WORKED

If a producer of hose couplings for industrial buyers uses specialized
packaging companies it may employ them to package seasonal products.
Many producers, such as food processors, agricultural cooperatives,
and gift marketers have large packaging needs during certain times of
the year, when demand for their products is substantial. At other times,
demand drops off or even stops and there is no need for the extra
packaging help. The use of the specialists assists producers, in that
they do not have idle packaging personnel and equipment during slack
times.

ANSWER B
INSTRUCTIONS Answer this question: "What functions do packages accomplish for
marketers?" Then go into this section in search of answers.

EXAMPLE

Packages are a major determinant of what consumers buy. Numerous
blind tests have shown that consumers cannot distinguish between
their favorite soft drink and one that they refuse to drink (when
the identities of the drinks are concealed). To a large degree,
then, consumers are not buying products--they are buying packages.
If their favorite drink was in a different can or bottle, they
probably would not like it.

DETAILS

There are eight functions that packages perform:

1. Protection.
2. Containment.
3. Sanitation.
4. Communication.
5. Unitization.
6. Pilferage prevention.
7. Apportioning and dispensing.
8. Utility for reuse.

Probably the most fundamental function of packaging is to protect
the product from the point of its manufacture to the point of use.
A product can become damaged while in transit, storage, or sitting
on a consumer's shelf while waiting to be used. Protective packages
are a major feature of potato chips, keeping the contents fresh and
unbroken until they are consumed.

Damaged products cost manufacturers, intermediaries, and consumers
millions every year. At least some of this can be reduced through
careful packaging. Shrink wrapping items to a cardboard or other
type of solid base can protect the product and still allow consumers
to view the contents of the package. Packages are available that can
keep insects out of foods, prevent breakage of the product if it is
dropped, and keep moisture and dust away from the product. Innovations
in the packaging industry are continually being made to protect the
product.

PROBLEM 2

A doll manufacturer is designing a package for its newest market
entree. The most fundamental function of the package should be:

A. Containment.
B. Pilferage prevention.
C. Apportioning and dispensing
D. Protection.

WORKED

A doll manufacturer is designing a package for its newest market
entree. The most fundamental function of the package should be
protection from the point of its manufacture to the point of its
use. Dolls are in special need of protection because children like
to play with them and other toys in retail stores. Many children
are unsupervised and misuse the dolls. In the process, they can
quickly become shopworn merchandise and unsalable or salable only
at a discount.

ANSWER  D
INSTRUCTIONS Answer this question: "What functions do packages accomplish for
marketers?" Then go into this section in search of answers.

EXAMPLE

Packages are a major determinant of what consumers buy. Numerous
blind tests have shown that consumers cannot distinguish between
their favorite soft drink and one that they refuse to drink (when
the identities of the drinks are concealed). To a large degree,
then, consumers are not buying products--they are buying packages.
If their favorite drink was in a different can or bottle, they
probably would not like it.

DETAILS

Containment is another function. Packages serve to hold products.
Imagine trying to handle a month's supply of toothpaste without a
tube. Without packages, marketers could not distribute and handle
many items, such as liquids, loose solids, and corrosive and gaseous
products.

Packages provide various sanitary functions, including spoilage
reduction and reducing nutrient loss. Further, disposable packages
can sometimes offer better sanitary protection than containers that
need washing before reuse.

Packages enable marketers to communicate information about contents,
handling requirements and use to prospective final customers as well
as to channel members. Further, properly designed packages can serve
as a means of promotion, capturing customers' attention and interest
as they pass an item on a retailer's shelf.

PROBLEM 3

A major packaging function for a toy manufacturer is:

A. To promote the product on retailers' shelves.
B. To enable the producer to grant more favorable terms of sale
   to wholesalers.
C. To increase the length of the channel of distribution.
D. To allow the manufacturer to grant discounts to retailers.

WORKED

A major packaging function for a toy manufacturer is to promote the
product on retailers' shelves. This is particularly important for
impulse items like toys, where the decision to buy is made in the
store. Attractive packages gain attention and interest and can
induce a desire to make a purchase. Many consumer purchases are made
on impulse, so using packaging as a promotion tool makes sense. The
package will have to appeal to both parents and children. Further,
it may have an important protection function, as many children damage
toys while they are in retail stores.

ANSWER  A
INSTRUCTIONS Answer this question: "What functions do packages accomplish for
marketers?" Then go into this section in search of answers.

EXAMPLE

Packages are a major determinant of what consumers buy. Numerous
blind tests have shown that consumers cannot distinguish between
their favorite soft drink and one that they refuse to drink (when
the identities of the drinks are concealed). To a large degree,
then, consumers are not buying products--they are buying packages.
If their favorite drink was in a different can or bottle, they
probably would not like it.

DETAILS

Unitization is another important packaging function. Packages permit
marketers to combine a number of individual packages into collections
that represent an efficient entity for buyers. For example,
manufacturers wrap candy bars individually, then place 24 bars in a
box, then transmit 12 boxes into a shipping carton, and further
unitize cartons on a pallet for shipment.

Pilferage (on the part of customers and employees) from retail stores
exceeds ,10 million per day. Packaging can help to reduce such theft.
For example, a blister-pack fitted over a product with an oversized
cardboard backing makes items like razor blades or cassettes difficult
to steal.

Packages enable buyers to apportion and dispense items to facilitate
need satisfaction. For example, safety caps prevent children from
consuming certain dangerous over-the-counter prescription drugs,
and instant coffee is available in easy-to-reclose jars.

Utility for reuse is an important function for some offerings.
Producers design some packages to provide buyer utility (reuse).
Decorator glasses, plastic margarine tubs, and designer perfume
dispensers all can increase a product's total worth by making
the packages themselves useful to buyers.

Each of the eight packaging functions that we have covered in this
section are not equally important for all products. Some products,
such as tent stakes, need little protection, while others, such
as personal computer diskettes, are very delicate. Some firms
utilize aseptic packaging, which removes all contamination through
sterilization and allows fruit juices and other drinks to be stored
without refrigeration.

PROBLEM 4

Unitization is an important packaging function for:

A. Personal computers sold to consumers for personal use.
B. Refrigerators that are at least 12 cubic feet in size.
C. Books on bird-watching sold in retail stores.
D. Soft drinks sold to the mass market.

WORKED

Unitization is an important function for soft drinks sold to the
mass market. Producers place units in 6 packs, 12 packs, 18 packs,
and cases for sale to consumers. Experience has shown that consumers
will buy more soft drinks when the bottles or cans are unitized than
they will if they are sold individually. Buying more ultimately
results in drinking more, so this practice works to the advantage
of the bottlers. In some countries where personal incomes are very
low, individual bottles or cans are sold because many consumers do
not have sufficient funds to purchase a unitized amount.

ANSWER  D