Note on Packaging-Levels and Importance, Product Line and Product Mix Strategies

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Packaging

Packaging refers to the design and production of the container or wrapper for a product. Traditionally, the primary function of the package was just to hold and save the product. In this modern period, however, numerous factors have made packaging one of the essential marketing tools as well. Increased competition and clutter on retail store shelves mean that package should now perform different sales tasks—from attracting attention to describing the product, to make the sale. Firms are realizing the power of good packaging to create immediate customer recognition of a brand. For example, average supermarket stocks 50,000 items; the average Walmart supercenter carries 145,000 items. The typical shopper passes by some 500 items per minute, and from 50 percent to 80 percent of all purchasing decisions are made in stores. Due to this highly competitive environment, the package might be the seller’s last and best chance to influence consumers. Thus, for many firms, the package itself has become one of the important promotional media.

Poorly designed packages could cause headaches for the consumers and lost sales for the organization. Innovative packaging could provide a company an advantage

 

Levels of Packaging

Primary package

The package, that has enclosed the actual commodity, is primary package.

The product’s immediate package is primary package. Such package remains attached to the product until the consumers have completely used it. Bottles of medicines, cigarette packets, match box, toothpaste tube, etc. are the examples of primary package.

 

Secondary package

Secondary Package refers to the layer of cover that is added to the primary package for its protection. After the product is brought at home or is ready to use, the secondary package is thrown or taken off. The cover of soap, the cardboard box in which tube of toothpaste is packed, etc are the examples of secondary package. The customers don’t keep secondary package for long.

 

Shipping package

Shipping package is used to facilitate identification, handling, transportation, and storing the products. Shipping package is very necessary for the products of such nature which are to be stored for a long period of time, to carry far away and that need to be loaded and unloaded many times. Under this package, there might be many primary and secondary packages. Cartons, wooden boxes, cardboard boxes, plastic boxes etc. are some examples of shipping package.

Functions of Packaging

Product Identification

Packaging serves as an identification of the product. The products are packed in special sized, colored and shaped container for making it different from that of the competitors.

Product Protection

The major function of packaging is to protect the product from various things such as from dirt, insects, dampness and breakage.

Convenience

Packaging provides convenience in the carriage of the product from one place to another while stocking and consuming.

Product Promotion

Packaging simplifies the task of sales promotion. Packing components in the house remind the consumers constantly about the product. In this way, packaging performs the role of a passive salesman and it increases the sales.

Product Line Decisions

Beyond decisions about the individual products and services, product strategy also calls for building a product line. A product line refers to the group of products which are closely related because they function in a similar manner, are sold to the same consumer groups, are marketed via the same kinds of outlets, or fall within given price ranges. For example, Nike produces various lines of athletic shoes and apparel, and Marriott offers different lines of hotels.

The main product line decision involves product line length—the total number of items in the product line. The line is too short if the manager could increase profits by adding items; the line is too long if the manager can increase profits by reducing items. Managers must need to analyze their product lines periodically in order to assess each item’s sales and profits and understand how each item contributes to the line’s overall performance.

Product line length is mainly influenced by organization objectives and resources. For example, one objective may be to allow for upselling. Thus BMW wants to move their customers up from its 1-series models to 3-, 5-, 6-, and 7-series models. The other objective might be to allow cross-selling: HP sells printers as well as cartridges. A company could expand its product line in two different ways: by-line filling or line stretching. Product line filling refers to the addition of more items within the present range of the line. There are different reasons for product line filling: : for satisfying dealers, using maximum capacity, being the leading full-line organization, and plugging holes to keep out competitors. Line filling is overdone when it results in cannibalization and consumer confusion. The firm must ensure that new items are noticeably different from the existing ones.

Product line stretching occurs when an organization lengthens its product line beyond its current range. The company may stretch its line downward, upward, or both ways. Companies that are located at the upper end of the market could stretch their lines downward. A company may stretch downward to plug a market hole that otherwise would attract a new competitor or respond to the attack of competitors on the upper end. Or it might add low-end products as it finds faster growth taking place in the low-end segments. The fit, economical to drive and priced in the $14,000 to $15,000 range, met increasing customer demands for more frugal cars and preempted competitors in the new-generation mini car segment. Firms can also stretch their product lines upward. Sometimes, firms stretch upward to add prestige to their current products. Or they might be attracted by a faster growth rate or higher margins at the higher end. For example, some years ago, each of the leading Japanese auto firms introduced an upmarket automobile: Honda launched Acura, also Toyota launched Lexus and Nissan launched Infiniti. They had used entirely new names rather than their own names. Firms in the middle range of the market might decide to stretch their lines in both directions. Marriott did this in its hotel product line. Along with regular Marriott hotels, it has added eight new branded hotel lines in order to serve both the upper and lower ends of the market.

The main risk in this strategy is that some travelers will trade down after finding that the lower-price hotels in the Marriott chain provide them pretty much everything they want. However, Marriott would rather capture their customers who move downward than lose them to competitors.

Product Mix Decisions

The company with several product lines has a product mix. A product mix consists of all the product lines as well as items that a particular seller offers for sale. The product mix of Colgate consist of four major product lines and they a oral care, home care, personal care, and pet nutrition. Each product line has several sub-lines. The home care line consists of fabric conditioning, dishwashing, and household cleaning products. Every line and sub-line consist many individual items. Overall, Colgate’s product mix consist hundreds of items. A firm’s product mix has four important dimensions and they are width, length, depth, and consistency.

Product mix width is related to the number of different product lines the organization carries. For example, the “Colgate World of Care” has a fairly contained product mix, consisting of personal as well as home care products that consumer can trust.

Product mix length means the total number of items firm carries within its product lines. Colgate typically carries different brands within each line. For example, its personal care line consists Softsoap liquid soaps and body washes, Speed Stick deodorant, Irish Spring bar soaps, and Skin Bracer and After aftershaves.

Product mix depth is related with the number of versions offered for each product in the line. Toothpaste of Colgate come in 16 varieties, ranging from Colgate Total, Colgate Sensitive, Colgate Max Fresh, and Colgate Tartar Protection to Ultra Brite, Colgate Sparkling White, Colgate Cavity Protection, Colgate Luminous, and Colgate Kids Toothpastes. All variety comes in its own special formulations.

Finally, product mix consistency refers to how closely the various product lines are related in end use, production requirements, distribution channels, or other way. The product lines of Colgate are consistent in so far as they are buyer products and go via the same distribution channels.

These dimensions of product mix provide the handles for defining the organization’s product strategy. The organization can increase its business in four ways.

(1) It could add new product lines, widening its product mix. Due to this, its new lines build on the firm’s reputation in its other lines.

(2) The firm could lengthen its existing product lines to become a more full-line firm.

(3) It could add more versions of each product that will deepen its product mix.

(4) The organization could pursue more product line consistency—or less—depending on whether it wants to have a strong reputation in a single field or in different fields.

 

Reference

Kotler, P., & Armstrong, G. (2013).Principles of Marketing.Chennai: Pearson India Education Services Pvt Ltd.

  • Poorly designed packages could cause headaches for the consumers and lost sales for the organization. Innovative packaging could provide a company an advantage.
  • The main product line decision involves product line length—the total number of items in the product line.
  • Product line length is mainly influenced by organization objectives and resources
  • Product line stretching occurs when an organization lengthens its product line beyond its current range
  • A product mix consists of all the product lines as well as items that a particular seller offers for sale.
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