.png)
Cost of Packaging, Packaging is the best way to advertise, Summing up, What are the factors affecting cost? Higher the cost, better the packaging, Hence more sales? Packaging influence whether the product will ever get onto the store's shelf.
Cost being borne by the consumer/ Manufacturer.
Packaging costs are also paid by consumers. If the product is expensive then so does the packaging that comes with it, consumers of premium brands are more often than not willing to pay the price.
Factors affecting the cost of packaging are:
Fragility of product
Volumes
Complexity
Sundries / Secondary material
Marketing
Role in Supply Chain
Packing is a factor affecting costs, it also causes price increases for the product. The manufacturers will bear the additional costs of packing. And if these costs can provide the desired advantages by reflecting on prices, it will not cause any problems. However, packing should fulfill all its functions for consumers willing to pay a high price.
Packing causes a price increase because it causes extra costs. Sometimes, the investments in packing are more than the advertising activities, consequently, packing is an important factor for the manufacturers to determine the price.
The product with an increased sales price also has an impact on the total contribution margin. In this case, increasing packing cost causes increases both in the total sales value and the total contribution margin.
The closeness of the relation between the contribution margin and sales price shows how the packing cost is important for profitability. Attention to packing is very important for high prices.
Many firms develop their package designs for improving both their competitiveness and product quality. Some firms are quite conservative and overprotective about their package designs. And this situation causes high material and transportation costs. Package designers are looking for different ways to design packages for providing minimum cost and high profitability while protecting the product from environmental impacts. Packing costs can be decreased by redesigning the product and the logistic system. For instance; transporting more products at once decreases the loading-unloading and transportation expenses. During the design phase, product designers do not always consider how the product will be transported. Actually, a small design change decreases the packing costs and protects the product more.
Tarnef suggests that a protective packing and planned transportation plan can decrease the loss and damage by up to 75%. New packing technologies provide competitive advantages in the markets. Packing technology has begun creating a competitive advantage also in the logistics process. Packing costs, technological developments, and environmental effects show that packing decisions are an extremely strategic issue for firms.
Advertisement
Packaging is used as means of advertising.
Packaging trends and innovations can influence whether the product will ever get onto the store's shelf.
Packaging is very important in the promotion of a product. Good packaging and interesting aesthetics will attract the attention of potential customers. Good packaging can be influential in the decision to purchase a product. Packaging in combination with an advertising campaign and the right price, a product can be successful.
Packaging promotes advertising in the sense that a nice and attractive package tends to draw the consumers towards the purchase. For example, a good-looking color mixture, a photograph of accepted faces, etc. It helps in pulling people towards the purchase of the product. In this view sometimes it is thought that the packaging of the product works better than advertising.
Advertising can be easily ignored. Products? Not so much. When a consumer sees your products on a shelf in a store, in an online e-commerce experience, or when they receive a delivery from you, you have their undivided attention, at least for a few seconds.
Packaging can communicate your products’ values and benefits, as well as your company’s mission. The outdoor equipment company Primus, which manufactures goods used in camping and outdoor adventures, uses a material in its packaging that communicates its products’ quality and performance.
Conclusion
Packaging is thus considered an important part of the business environment. It has changed in various forms over the years. The role of packaging has also changed over the years. In the old days, it was used just for protection purposes but now it is used as a promotional tool and has become an important part of the products.
Recently, packaging has become a strong marketing instrument, especially with the development of the retail sector. Packaging promotes the brand and product to consumers. The quality evaluation of a product is done according to its package. Consumers assume that, if a package is of high quality, the product in it is also of high quality. However, if a package symbolizes low quality, the product does not have sufficient quality. The final factor affecting the purchasing behavior of consumers is packaging. Packaging is the last chance for manufacturers to sell their products.
Comments