Impact of FMCG food Packaging on Consumer Buying Behaviour

Chapter 1

Introduction 

&

Preliminary Data Gathering

1.1: Introduction to the Report:

During the last two decades many important developments in the position of food in daily life of consumers and producers takes place. In earlier times consumers were self sufficient, but during the last two decades things have been changed and there was a rapid development in the industrialization of food packaging communication process. So this research study focuses on the area of Packaging which is one of the most important elements of marketing mix and many marketers had considered packaging as a fifth ‘P’ , while the other four P’s are Product, Placement, Promotional and Price. So packaging is used as an important marketing tool. In marketing terms, Packaging can be defined as: “All the activities of designing and producing the container or wrapper of a product, Packaging is a structure designed to contain a commercial food product, i.e. to make it easier and safer to transport, to protect the product against contamination or loss, degradation or damage and to produce a convenient way to dispense the product” 1.

Packaging mainly can be divided into three types, i.e. Consumer Packaging, Transport packaging and Food Packaging. This study is specified only to food packaging as food packaging industry requires packaging material that provides efficient barriers, preserves product effectively and therefore increases the shelf life of the product 2. However packaging is criticized largely from the environmental point of view, because many researchers think that packaging is depleting natural resources, as certain form of packages are health hazards, and there is a significant problem of disposing of these packages. Marketing researchers have to deal with these criticisms, and must enhance the positive features of packaging, like product protection, preservation, containment, communication, consumer convenience and marketing support 3.

In context of above description, this study is basically consists of observations, surveys and interview from the consumers not only to determine how packaging of existing FMCG food products contain, preserve, and communicate the buyer, but the new food products too, because the variables for selecting the existing food products are different from the variables for selecting the new FMCG food products, secondly to know the importance of packaging on their buying decision process both for existing and new products, how they get influence, and how a good quality and attractive packaging convince them to buy particular FMCG food products.

1.2: Background of the study:

The professional fields are becoming more and more challenging and competitive in the present arena. So, in order to endure and be successful in any field, you must have the deep knowledge and appropriate skills of the concerned field. In fact this is true about the fields of management sciences, in which the Knowledge and skills of a person can be polished, if he goes through some practical experiences. Therefore this study is mainly conducted to have the knowledge of practical business situations, because the theoretical knowledge might not always match with the practical situations, where we do businesses. Therefore this would be the socialization to the market in a sense of applying our theoretical knowledge in the practical fields.

In this regard, I have selected the area of Packaging for my research study which carries a great concern in the present arena because in the last one and half decade the importance of packaging has been actualized immensely and by having packaging knowledge and designing skills, practically you can enhance your capabilities. Packaging has covered all the consumer tangible goods in order to create and enhance the marketing efforts.

According to “International Association of Packaging Research Institutes” IAPRI, the packaging technology has gone through a significant and fast exploitation in recent years, and globally the packaging material and machinery industry is estimated to be worth of $ 500 billion per year representing almost 1-2 % of the GDP industrialized country, and over 100, 00 packaging manufacturing companies have employed approx 5 million people to serve all packaging business manufacturers company 4.

1.3: Introduction to the topic:

The topic for my research is “A Survey on the Impact & influence of FMCG food Packaging on Consumer Buying Behavior” in which we will try to explore the variables of packaging not only for the existing food products but for the new products too, which attracts consumer behavior and influence them to buy.

1.3.1: Importance of Packaging:

Many researchers together with Price, Promotion, Placement and Product considers Packaging as a fifth “P” as a marketing tools, because they think that packaging is a face of a product which actually refers to the material that servers to contain, identify, describe, protect, display and promote a specific product. The main objectives of packaging are to keep the food in good condition until it is sold or have been consumed and to encourage the consumer to buy it again and again. Correct packaging is essential to achieve above given objectives. Yearly billion of pounds are spent on packaging food.

1.3.2: Functions of Packaging:

There are many protecting functions and purposes of packaging that influence consumers to buy a particular product.The various functions of packaging can be divided into three main types: Primary, secondary and tertiary (additional Functions). Primary functions concerned with the technical nature of the product while the secondary and tertiary functions are related to communications.

The Primary Functions of packaging are to protect and storage of a product from loss, damage or any kind of deterioration from environmental conditions such as humidity, temperature, precipitation and solar radiation. i.e.; the durability of a package, because people wants material that will really protect the product they bought and something that can resist handling and shipping.

The Secondary and Tertiary Functions of packaging are the sales, promotional, service and guarantee functions. The main intentions of sales function of package is to promote the sales processes and to make it more effective and efficient, therefore in designing a package promotional materials should be placed at right place, because it plays an important role to communicate about the product functions, features, and other informational elements. The various informational elements such as product features, manufacturing and expiry date, ingredients information, nutritional information, food labeling etc. provides the consumer with details about the contents and use of a particular product. Therefore these promotional materials should be properly placed on the package in order to attract the potential consumer’s attention and to have a positive impact on their buying behavior 5.

1.3.3: Consumer Buying Behavior:

The other main concern of the study is to know about consumer buying behavior or consumer decisions making process and how packaging can influence them to buy a particular product. Marella in one of her articles about packaging defines consumer buying behavior as the process by which “individuals search, select, purchase, use, and dispose of goods and services, in satisfaction of their need and want”. When consumers need to purchase something, they usually go for the brands which are trustworthy and try not to seek other products such as new products or the brand which they don’t know at all 6. Therefore at the point of purchase what communicates or influence consumer to buy particular product is only ‘Packaging’. Similarly quality judgments are significantly influence by the product characteristics reflected by the packaging because packaging acts as a communicator, and it underlines overall features and functions of a product that lies in it such as informational elements, product features, material used etc. So if the package is well design and attractive enough, consumer will likely to buy it especially in the case of new products. So, it is important that products should be well and attractive packaged to gain consumer attention.

1.4: Purpose of the Study:

Success of a product depends on developing a strong relationship with consumer through an affective and efficient synergetic marketing mix, in which ‘Packaging” is one of the main elements to influence because packaging is the language of a product which only communicate to the consumer without any interpreter and has an immense effect on purchase decision.

Most Fast Moving Consumer Goods (FMCG) is low involvement products. In low involvement, “consumers do not search extensively for information about the brands, evaluate their characteristics, and make a weighty decision on which brand to buy”, and as packaging plays an important role in success of a brand and on a retail shelf it is the last opportunity to influence the consumer to buy, so the main purpose of this research, so this study will be conducted with an idea of knowing the impact & influence of packaging on the purchase decision of FMCG food products, which are mostly consumed frequently and also to know the experiences of the ultimate consumers about packaging.

The research study is basically conducted to apply my theoretical knowledge of marketing in the practical field of professionals by interviewing different consumers and to know their views and preferences towards the importance of food packaging.

The objective of the research study will be focused on:

1. To know consumer awareness about packaging.
2. To examine the influence of existing and new FMCG food products packaging on consumer buying behavior.
3. To examine consumer experience of purchasing packaged food products.
4. To understand how packaging can influence them to purchase their decision powers
5. To know whether a good and attractive packaging of FMCG food products can influence consumers to buy it or not?

Beside this the research is the partial fulfillment of the requirement for the Degree of Bachelors of Business Administration and the submission to the Institute of Management Sciences, Peshawar.

1.5: Methodology of the report:

This study has been conducted with the following procedures:

1.5.1: Reading Articles

Reading articles are the formation of the strongest foundation. For this research study I have been reading and looking at different articles and research studies both in libraries as well as through Internet and searching through digital libraries the literature of the my research study.

1.5.2: Questionnaires

The data for my research study has been collected from a representative sample of 200 people, who are responsible for purchasing the household food products and are also the ultimate consumers of the packaged food products.

The sample from population was derived from shoppers at different geographical areas of Peshawar. The questionnaire was initially put to pilot testing on 5 respondents for clarity and validity. Through the use of questions related to the study, the respondents were highly encouraged to express their opinions. The questionnaire comprised of few questions, grouped in five sections: Visual Impact, Brand Information, food labeling and nutrition information, and new products purchasing. The impact of these variables is analyzed in the Analysis section.

Responses of the consumers have been converted to frequencies and percentages by using SPSS software through which I developed the Bar chart or Histogram in order to explain the degree of impact of mentioned variables on the purchase decision I have also used the Pie chart method in order to find the most influencing variable on the purchase decision.

1.6: Scope of the Study

The Scope for my research study is limited to Peshawar city and the sample for my research has also been taken from the population of Peshawar city for collecting primary data. The market, which has been surveyed, is limited to the consumers in Peshawar region.

The reader of this research report will be able to understand the preferences of consumers about the packaging especially the food packaging, because consumers are more connected to the food industry. And also they would be having better understanding that how packaging can influence consumers’ purchase decision? Besides, this research study will also show the knowledge and understanding of packaging features and roles in the marketing efforts and new demands from the packaging industries as far as consumers are concerned.

1.7: Limitations

The first hurdle that I have faced is the unavailability of the secondary data about our local markets’ consumers therefore, in this stage I had the difficulty to find the relevant data as far as my study of research is concerned. Another limitation is the difficulty in collecting primary data in the market as I have used Questionnaire method but mostly respondents were not familiar about that how to understand and respond to a question being asked. Third limitation is time constraint, which is again a pressure on us to finalize the research report which might caused this research report be deficient in order to cover every aspect of my research study but still I made the best of it.

1.8: Sampling

The study population comprised of 200 people who are the ultimate consumers of packaged food products. The sample has been drawn from supermarkets located in different geographical areas in Peshawar and also collected data from the respondents in the universities. For my studies I used stratified sampling method and judgment sampling method. I divide my sample into three main strata’s like those males which got the purchasing power and do purchase regardless of the family members, second those female households which ultimately got the purchasing power, and lastly children’s. For children’s I used judgment sampling method.

1.9: Scheme of Report

This report is organized in five main sections. Section 1 consists of one chapter that describes the introduction of the report, objectives and the purpose of the report. Section 2 consists of two chapters that constitute literature of this study and Different variables involved, respectively. Section 3 also consists of two chapters in which theoretical framework and nature of the research, i.e. research design has been describe. In Section 4 there is one chapter in which the data analysis has been done and the last Section, which is Section 5, consists of one chapter that mainly includes the Conclusion and Recommendations of this Research Study.

References Cited:

(1) Marketing Dictionary, Small Business Encyclopedia: Packaging, Web Link: http://www.answers.com/topic/packaging

(2) Peters-Texeira, A., & Badrie, N. (2005). Consumers’ perception of food packaging in Trinidad, West Indies and its related impact on food choices. International Journal of Consumer Studies, 29(6), 508-514. Retrieved from E-Journals database.

(3) M. Sehrawet and S.C. Kundu, (2007), “Buying behavior of rural and urban consumers in India: the impact of packaging”, International Journal of Consumer Studies Vol:31, pp630-638

(4): Packaging Research: Background to Packaging, Online Available at:

http://www.iapriweb.org/packaging_research.html

(5): Transport information System, Functions of Packaging. Online Availabale at:

http://www.tis-gdv.de/tis_e/verpack/funktion/funktion.htm#anfang#anfang

(6): Marella, Does product packaging significantly influence consumer buying behavior? Online Available at: http://www.helium.com/items/1582891-packaging-affecting-consumer-behavior

Chapter 2

Literature Review

Literature Review:

2.1 Introduction:

This chapter presents the results of a comprehensive literature search in several aspects to this work. The prime objective of this literature survey is to identify those variables, which are involved in this research study about perception of food packaging, that how consumer perceive about food packaging in industry and how they are influence the purchase of consumer decision in choosing any FMCG food products.

2.2 Packaging Definition:

Packaging can be defined as, “All the activities of designing and producing the container or wrapper of a product”. The container is called package. Packaging is a structure designed to contain a commercial food product, i.e. to make it easier and safer to transport, to protect the product against contamination or loss, degradation or damage and to produce a convenient way to dispense the product 1.

Packaging also refers as a container, silent salesperson or a wrapper for a consumer product that assists a number of functions including protection and description of the product, contents and product marketing promotion. Creatively and innovatively designed packages actually add value to the product, if it meets a consumer need such as portion control, recyclability, tamper-proofing, child-proofing, easy-open, easy-store, easy-carry, and non breakability.

The labels on packages such as informational elements, nutritional elements, ingredients elements, brand information are such type of important components of the packages which enhance the overall marketing mix and can support advertising claims, build brand identity, heighten name recognition, and optimize shelf space allocations. When designing a packaging, the monetary value to manufacture, shipment, and display the package must be efficiently calculated. However, regarding to the packaging size and shape, the package must be design in a way that if it is small, then it should be small enough to accommodate available shelf space and large enough to dissuade theft. Furthermore, creatively designed packages must highlights the benefits of the product and contain an adequate amount of product to keep the per unit price competitive

2.3 Packaging Evolution:

In early times, Before the World War II, Packaging was primarily used and was often standardized to surround and protect products during storage, transportation, and distribution. The main role of packaging was to ensure the preservation and transportation of products and even for ease-of-use by the end consumer, but package design was typically left to technicians. However, After World War II, things were changed and companies became more interested in mass production and development of packaging and invest more in marketing and promotion tools as a means of alluring customers to purchase their products. As a result of which many manufacturers began to view packaging as an essential element of overall business marketing strategies to lure buyers.

This industry revolution and increased attention to packaging concurred with socioeconomic changes that were taking place around the world and on other hand with passage of time the consumers were becoming better educated, as a result of which their expectations of product, packaging designs and their trust on them was increased as well. Therefore, consumer began to rely much more heavily on manufactured goods and processed food items. New technologies related to production, manufacturer, storage distribution, and preservatives led to a massive increase in the number and type of products and brands available in industrialized nations. Thus, packaging became a vital means of differentiating items and informing busy consumers.

Packaging today, is regarded, as an essential part of a successful business practice. Package design became a marketing mix promotion tool, and as a new corporate cost-consciousness developed in response to increased competition, companies began to alter packaging techniques as a way to cut production, storage, and distribution expenses. Furthermore, marketers began to view packaging as a successful marketing tool to feat existing product lines by adding new items and to ticker new life into maturing product line 2.

2.4: Packaging Attributes:

Food products brands use a range of packaging attributes, which comprises of packaging colors, packaging designs, shapes, messages, and symbols (Pinya Silayoi & Mark Speece, Oct, 2004) 1. These attributes attracts and sustains the attention of consumers and help them to identify with the images presented. The importance of packaging design and the use of packaging as a vehicle for communication and branding are growing in packaged food competitive markets.

Consumer’s intentions to purchase packaged products depend on the degree of extent to which consumers expect that the product will satisfy their need when they will consume it. But there are certain situations when they haven’t even heard about the products so much while entering into the stores, (especially in the case of new products) so the intentions to purchase that very particular product is basically determined by what is communicated at the point of sale. So, at the time of sale when the product is not familiar to the consumer, the only factor that attracts consumers to purchase is Packaging which is also called as Silent Salesperson. It acts as s silent salesperson and became a critical factor when the consumer decision making process is in progress, and how they perceive it depends upon the communication elements, which become the key factor to success for marketing strategies.

Now to achieve that communication goal effectively and to optimize the potential of packaging, the marketers and the package designers must have to consider consumer perception point, their past experiences, their needs & wants, and understand how packaging design layouts get consumers to notice the package and notice messages on the package and evaluate packaging design and labeling for their effectiveness in the communication effort because it is also important to notice that not all consumers evaluate the packaging in the same way.

2.5 Packaging Functions and Elements:

Pinya Silayoi and Mark Speece (2004), defines the basic functions of packaging logistically and marketing by their role. The logistical function of packaging is mainly to protect the product from incidence of damage, spoilage or loss through theft or misplace goods during movement through the distribution channel. While in the context of marketing function, the packaging should be attractive enough and well design, so that it conveys the message of product attributes clearly.

Now whatever the logical considerations of packaging, the marketing function of packaging attributes plays a vital role as a communicator and it is only the package that sells the product by attracting and communicating the consumers, and allows the product to be comprised, divvy up, unitized and protected.

Quality judgments are largely influenced by product charactertics reflected by packaging, because package’s overall features can underline the uniqueness and originality of the product. If the packaging attributes communicates high quality, consumers assume that the product is of high quality. However if the package symbolizes or communicates low quality, consumers transfer this low quality perception to the product itself. So the packaging acts as communicator and communicates favorable or unfavorable implied meaning about the product. Mark Speece (2004) suggests that consumers are more likely to spontaneously imagine aspects of how a product looks tastes, feels, smells, or sounds while they are viewing a product picture on the package.

A review of the above literature indicates that there are mainly four packaging elements potentially affecting consumer purchase decisions. They can be separated into two categories; visual and informational elements. The visual elements consist of graphics, images size and shape of packaging. Informational elements relate to product information and information about the technologies used in the package. However the product information can further be categorized into food labeling, ingredients information, nutrition information, usage detail, and manufacturer’s / company details, manufacturing and expiry information etc.

2.6: Variables of Packaging:

2.6.1: Visual Elements:

2.6.1.1: Graphics and Color:

The implication of graphics is explained by the images created on the product. Graphics designs are visual presentations which include layout, color combinations, typography, and product photography all of which create a positive and distinctive image. For consumers, the package is the product, and different consumers respond to different packages in different ways depending on their involvement level (Silayoi & Speece, 2004). For low involvement products, such as FMCG, where initial impressions formed during initial contact can have lasting impact and where evaluation of attributes is less important in decision making, here then a highly noticeable factor such as graphics and colors becomes more important (Grossman and Wisenblit, 1999) (3). On the other hand, the behavior of consumers towards high involvement products is mostly influenced by image issues. For low involvement, there is a strong impact on consumer decision making from the development of the market through marketing communications, including image building (Kupiec and Revell, 2001). (4)

2.6.1.2: Placement of Visual Impact Elements Matters:

In packaging layouts, the placement of visual elements also plays an important role for consumer psyche, because a psychic research of Rettie and Brewer, (2000) (5) indicates that brain laterality results in an asymmetry in the perception of elements in packaging designs. The recall of package elements/attributes is likely to be influenced by their lateral pass position on the package, as well as by other usually recognized factors, such as font color, font size and font style. Research shows that for verbal stimuli recall is better when the copy is on the right-hand side of the package, and better for non-verbal stimuli when it is on the left-hand side. This may imply that, in order to maximize consumers’ recall, pictorial elements, such as product photography, typography, it should be positioned on the left-hand side of the package.

Grossman and Wisenblit (1999) (6), says in their research that consumers also learn color associations, which lead them to prefer certain colors for certain product categories. For a unique particular brand, using color as a clue on packaging can nurture a potentially strong association. However people in different cultures are exposed to different colors and according their own culture they develop different color preferences. So as a marketer, color consideration should be the part of their marketing strategies and by keeping in mind the color consideration according to people perception in different culture, colors of a particular logo, package or product design should be done after a thorough understanding of color association according to culture.

2.6.1.3: Packaging Size and Shape:

Silayoi and Speece, (2004) states that in packaging, the other visual elements such as size and shape are also important in consideration. Package size, shape and elongation also affect consumer judgments and considerations. Consumers use these things as simplifying visual heuristics to make volume judgments. They generally perceive more elongated packages to be larger.

In case of sizes, especially for generic products, different sizes of packages may appeal to consumer with different involvement level. Usually generic products are packaged in larger sizes, which communicate to consumers who are specifically looking for good deals. So, this implies that when the product quality is hard to determine, as with generics, the packaging size effect is important. Thus elongating the shape, within acceptable bound, should result in consumer thinking of the package as better value for money also conceivably affect perceived volume.

2.6.2: Informational Elements

2.6.2.1: Product Information

Product information includes information elements, such as food labeling, nutrition information, health information, ingredients information, manufactures date, expiry date.

In high involvement level, the behavior of consumers toward product characterized is less influenced by image issues, graphical and visual response, in such cases consumer seeks product information which is one of the important packaging functions to communicate. (Kupiec and Revell, 2001; Silayoi and Speece, 2004). (7) Written information on the package can assists consumers in making their decisions carefully as they consider product characteristics.

Package layout is important for information presentation. Food labeling is considered as significant information on packaging and a recent study shows that 90 percent of the consumer’s trends towards healthier eating have highlighted the importance of labeling, which also allows consumers the opportunity to cautiously consider alternatives and make informed food choices. However, packaging information can create confusion by conveying either too much misleads the inaccurate information. Manufacturers and package designers often use very small fonts and very dense writing styles to pack extensive information on the label, which lead to poor readability and sometimes confusion.

As confusion can affect consumer decision quality, So Mitchell and Papavassiloiu (1999) (8), suggests that consumer confusion of information overload can be reduced by narrowing down their choice sets, because by reducing their choice alternatives and evaluation attributes decreases the probability that they will be confused by excessive choice and information overload. This strategy could also be applied to more experience consumers, because loyal consumers potentially look fewer brand alternatives. So, it is the experience which makes consumer more selectively perspective and restrict the scope of their choices.

Hughes (1998) (9), in one of his journals grabs the attention towards involvement level, that sometimes involvement level reflects the extent of personal relevance of the individual’s personal goals, basic values and self concept. If the product does not stimuli much interest, consumers do not give much attention to it. High involvement level shows more personal relevance. In general, consumer acquisition of low involvement products is often done without carefully examining brand and product information. This lack of commitment suggests that information on the package would carry relatively less value in such cases. On the other hand, more highly involved consumers evaluate message information more carefully, relying on the message to form their attitudes and purchase intentions (Silayoi and Speece, 2004).

2.6.2.2: Packaging Technology

Packaging for the FMCG food products in market plays a vital role in promoting the product to the customer, as well as carrying informative and legislative detail. Combining these roles requires commercial awareness, detailed knowledge of the relevant technologies, creative image care and consideration of the effect of colors, typography, photography that must support the product or brand. Design and technology of packaging decoration for the users market guides you through the technical and commercial factors to consider when planning the decoration, or label, of a package (10). Technology is basically somewhat related to the informational elements, because packaging technology conveys informational messages such as nutrition, health, ingredients which is linked to the consumer life style, so the technology of packaging development that constrained in the message communicated through technology must fulfill consumers need criteria.

Consumers are even often prepared to pay slightl