Once seen as a relatively secondary aspect to be considered in the marketing mix of a product, nowadays the label is seen as a determining factor to increase the visibility, the recognition by the consumer and the sales of a product.
Several studies confirm that a product label plays a decisive role in marketing communication and in the “level” of consumer interest in the product.
If this is a fact for well-known brands, it is even more important for young brands that are asserting their position in the market.
Nowadays, more and more major retail chains are adopting technological solutions to facilitate product tracking, reduce costs and increase sales. At the same time, they are also adopting customer-centric policies in order to leverage the business. This type of policy allows retail chains to customize the layouts of their points of sale based on consumer demographics. For example, RFID (Radio Frequency Identification) labeling puts the focus on the customer and allows retailers to maintain real-time data on product and sales status. This way, retailers can strategically manage their product portfolio by allocating the products with the lowest sales to less desirable locations in the store or, simply, choose to discontinue these products due to low sales response. As a result, to keep their product visible and impactful to the consumer, suppliers are increasingly challenged to label their products to meet the needs of their end customers, retailers and wholesalers.
When structuring the marketing mix of a product, in order to develop a strategy that allows achieving the best sales results, it is important to carefully analyze several aspects that have a decisive weight in this process. From the successful strategies of leading retailers that can serve as a benchmark, to labeling and packaging requirements for specific retailers, the label and packaging design centered on the preferences and needs of end and intermediary customers and, last but not least, the use of technology to minimize costs and maximize consumer data and sales.
What’s truly important is to realize that the “product variable” of the marketing mix encompasses many “issues” that must be well thought. From the name of the product, its benefits, characteristics, composition and attributes, and, not least, the type of packaging and the colors, format, type of material and graphic and textual elements of the label.
Labeling, packaging and customer centricity
When it comes to the packaging and labeling of a product, the golden rule dictates the principle that the consumer should be able to see and recognize the product 4 meters away from the shelf where it is displayed. This is the standard of large retail and wholesale chains.
In addition to attracting a given target market, the label and packaging must also take into account the specific demographics of the retail channels that distribute the product to the final consumer. Let’s have in mind that the first decision that a consumer makes when he needs to purchase a given product is relative to the store where it will make the purchase. This customer centricity, among other factors, is what guarantees marketing and sales success.
Thus, it is important that a manufacturer or supplier maintains a close line of communication with its network of retailers and wholesalers, as this close relationship can provide very useful insights for all parties involved in the process.
As retailers are increasingly focusing on customer centricity in order to win and retain customers, product labels and packaging must take into account the specific demographics of the retailer and customer. For example, suppliers who want to sell their products in a gourmet channel can create a specific product line for this type of channel, which has a consumer with very specific needs, desires, preferences and concerns.
Each retailer assumes a unique consumer expectation. Using this kind of knowledge to respond to customer expectations can prove to be highly beneficial.
Capture the consumer’s attention
As already mentioned in this article, a product´s label and packaging must immediately capture the consumer’s attention.
If the label and packaging can get the potential buyer to look again at the product, the likelihood of a successful sale increases significantly. Having caught the consumer’s attention through an impactful and innovative design, the label must also be clear, consistent with the product’s marketing positioning and easy to read. If, in a few seconds, the consumer cannot determine what the product is or what it does, the probability that he will move on is much greater.
Suppliers or manufacturers can extend the reach of their integrated marketing communications programs by using a common brand identity across all product lines. In addition to making it easier for the consumer to recognize the product, it is also an efficient strategy to create brand recognition and credibility.
The shift in consumer behaviour
When it comes to designing a product’s packaging or label, adapting to customer demographics is, as we’ve seen, important. Many companies obtain qualitative data on consumer preference through studies conducted through “focus groups”, retail panels, market research companies, or other data relating to customer buying behavior.
With this data, it is possible for a brand to understand what makes a label or package more appealing to the consumer, which has a direct effect on product sales.
The packaging and label must also function properly with regard to their application conditions. Labels that wrinkle or peel off the product convey poor quality to the consumer. When choosing the material from which the packaging or label will be made of, it is important to look carefully for the solutions that best adapt to the product. The market offers many different solutions that must be properly considered.