Effect of product packaging - Research Paper Example

? STUDYING THE EFFECT OF PRODUCT PACKAGING AND PRODUCT SHELF PLACEMENT ON THE CONSUMERS’ PERCEPTION Manufactures and retailers are constantly bombarding their products on the customers; marketing them in a way so as to make their product better attracted or perceived than their competitors. They are using different techniques to register their product in consumers’ minds. Marketers are using unique and innovative steps to make on the point purchase decision in favor of their product. In this race of gaining competitive edge over others, they are playing with customer perception. Key words: consumer perception, product packaging, product shelf placement, decision making choice INTRODUCTION According to psychology, perception is defined as our ability to make some kind of response or action, when we are exposed to external stimuli. In a day life, we are exposed to thousands of stimuli; we ignore many and respond to certain. This kind of human behavior, that is accepting or perceiving positively one signal while rejecting the others, is influenced by different environmental stimulus like the extent of exposure. Sometimes repeated exposure to one kind of stimuli can either make us oversensitive or desensitized to the stimulus. Additionally, our perception is affected by the amount of attention we focus on something. As already defined, perception does not mean becoming just aware of surrounding; rather it involves processing and interpretation of stimuli, which then generates our response or action. Hence, our process of recognizing a certain stimulus depends on number of times we are exposed and amount of attention given to a particular stimulus. This explains that why marketers are working hard on understanding the relationship between consumer perception and product selection. Over the past few decades, the marketing environment has become increasingly complex and also highly competitive. Successful businesses are spending more to understand how to leverage the different factors that influence consumer buying behavior in order to effectively market their products and in return, be able to maximize sales. Many researchers have added their input in this field but it’s not sufficient. Studies have highlighted four main factors that generally play a role in the consumer's buying behavior and these are cultural factors, social factors, personal factors and psychological factors. Of many of the psychological factors, most important one is perception; as we have seen most of the in-store purchase depends on consumer perception. Thus, we can say that retailers or marketers are playing with consumer perception in order to sell their products. Of many of the factors that trigger consumer purchase intention in store the two important ones are the product shelf placement and product packaging. Perhaps, the positioning and placement along with attractive packaging of a product on the shelf in a store really matters and is directly linked to the sales of the respective product. One cannot negate the importance of advertising as a highly effective means of communication used to inform consumer about product but media fragmentation has made the situation highly competitive for marketers to reach and communicate with customers, thus forcing them to adopt more innovative means of reaching their target market (Hill and Tilley, 2002). Hence, in the modern marketing environment role of packaging cannot be denied as an innovative marketing tool, as it reaches to large target audience. Many people have claimed that products stacked in the middle shelf tend to gain more consumer intention rather than products on lower and higher shelf but Frank & Massy, (1970) have argued this statement, they have declared that volume of assortments available in a store have an impact on the product placement on the level of shelf. Bultez & Naert (1988) are of view that consumers usually ignore the brands and their products not placed at optimal eye level of the consumer as it hinders consumer perceptual process and moreover, shelf placement has a positive impact on sales. In accordance to the research of Reinartz & Kumar (1999), the most important factors that impact consumer purchase are the store location, in-store attractiveness and the placement or the arrangement of products within the store. Cox (1964) have proved that not all the product types’ placement on shelf had an impact on consumer buying behavior, there are some product that fall out of this impact; and these products include the staple products that are the basic necessity products which are the products other than impulse products. Major purchasing decisions are made at point of purchase, (Kollat & Willett, 1967) and many factors at point of purchase contribute in making purchase decision. The factors include the product appeal and in product appeal the first and foremost things to be considered are the packaging and shelf placement of the product. This is how marketers make their product appealing to consumer perception. Moreover, shelf placement itself includes numerous factors which are shelf space, variety, gap between product and floor, and total number of rows in a shelf and still many to find (Chiang & Wilcox, 1997). Many researches’ have been conducted on the product packaging which highlight the important purpose of packaging i.e. it should help in making product stand out from the rest of its kind. We have seen that marketers are spending more and more in finding ways to attract customer to make them purchase or just notice their product. They are ignoring the ethical considerations while doing so; peeping into consumer or its better to say public minds and playing with them. The very purpose of this research is to highlight the many ways through which the marketers are trying to alter the free will of consumer. LITERATURE REVIEW When a consumer steps into a shopping mart, s/he is encountered by numerous brands and their products, lot of question are in consumer’s mind, what to buy, which brand to try and lots of other stuff. So how consumer should decide which product to buy? Should it be a free choice or forced one? Extensive literature is available regarding the placement of product on shelf and effect of packaging in different environmental settings. Bultez & Naert (1988) conducted an in-store experiment in Cash-Battard on dog- food assortments, and it implemented S.H.A.R.P. that resulted in the increase profitability ranging from 6.9% to 33.8%. Therefore, implementation of S.H.A.R.P. has a direct impact on sales, so the manufacturers should give significant importance on product shelf placement. Moreover, this study has opened new horizons for conducting further in-store experiment with different assortments and re-confirming the test result. Perhaps, factors like brand loyalty and package size purchasing habits that can off-set the results of the study. Furthermore, Cox (1964) in his article titled as “The Responsiveness of Food Sales to Shelf Space Changes in Supermarkets” has clearly mentioned the impact of product shelf placement on sales. He has declared that food product sales are responsive to changes in shelf space and that "impulse" items are relatively more responsive than staples. The method used for studying the very relation was randomized grouping design and Latin square design. He had emphasized on the fact that there is always “battle of shelf space" between manufacturers and retailers because both want to increase the sales. Moreover, his study revealed that not every product type is affected by its in-store shelf placement. The article “Shelf Position and Space Effects on Sales” written by Frank & Massy (1970) have also elaborated the impact of product shelf placement on the sales of the product. Moreover, the researchers selected retail shelf merchandising policies on the sales of particular brand & size combinations for a branded, frequently purchased grocery product. Cross-sectional analysis was conducted in order to study product shelf position; the study included the rows, length and height of the shelf. The researcher found that the lower shelves are more effective in high volume stores with small container size, thus not only the shelves dimensions matters but also the stores capacity, and product packaging also do matters. Curhan (1973) in his article “Shelf Space Allocation and Profit Maximization in Mass Retailing” has stated the relationship of shelf space allocation on unit sale. The researcher has suggested SLIM (Store Labor and Inventory Management), a scheme for allocating shelf space so as to minimize overall store stocking expense, thus reducing the inventory. Moreover, the research has provided the information that occasional purchase products should be given maximum place on shelves, because such products have less brand loyalty. The research findings also have stated that the degree of availability of substitutes has an impact on the shelf placement of the product in store. Reinartz & Kumar (1999) conducted the research on the drivers that will result in better store consumer characteristics and the factors considered by the researchers are store, market and consumer characteristics and competition. The article was titled as “Store-, Market-, and Consumer-Characteristics: The Drivers of Store Performance”. The most important characteristic among the four of them is the store location, in-store attractiveness and the placement or the arrangement of products within the store. The researchers conducted cross sectional analysis between stores along with this; Scanner Data Analysis was done in order to find out the factors leading to in-store attractiveness that would include the product shelf placement as well. The main findings of the paper were that the store location is the most important factor and if the store location is not good enough than, the retailers should go for increasing the in-store attractiveness and one of the ways to increase it is by product shelf placement and sequencing. Cox (1970) in his article “The Effect of Shelf Space upon Sales of Branded Products” has identified the opportunity cost of a unit of retail space, is the gross profit the retailer can obtain by allocating this space to the most profitable item. The research identifies another attribute of manufacturers that they are always looking for maximum space on shelf regardless of the position on the shelf that will attract most customers. Stocking large amount of product in shelf will enhance the chances of customer focus on the product. Razzouka, Seitza, & Kumarb (2002) have also conducted research on the topic related to product shelf placement. In their article “The impact of perceived display completeness/incompleteness on shoppers’ in-store selection of merchandise: an empirical study”, the researchers have clearly stated that sales of non-durable goods at retail outlets depends on point of purchase displays and merchandising strategies. Moreover, strategic placement of products on the retail shelves has resulted in increase sales of impulse products. The research has also declared that customers usually do not buy from the empty and near empty shelves, thus the products should be stacked in the shelves properly in order to gain customer attention. The researcher conducted in-store experiment comparing the near empty shelves and shelves that are stacked properly with similar branded product and thus analyzing the consumers’ purchase behavior towards the product placed in the two shelves. Kollat & Willett (1967) have linked the concept of impulse buying with that of in-store stimuli’s which include product shelf placement, displays, and other positioning techniques. Their article “Customer Impulse Purchasing Behavior” have explained that the customers differ in making unplanned purchase decision. There are numerous factors that enforce the impulse buying behavior includes; exposure to in-store stimuli, customer commitment and loyalty toward a brand. An in-store field study was conducted with the help of comparison between experimental groups and control groups in order to study consumer’s response toward impulse buying. Moreover, authors have explained the fact that unplanned purchases are the result of two things; either out of stock same brand or an inventory addition in same brand category. Thus, the unplanned purchases are resulted depending upon the availability of product and placement of product on shelf and how attractively the product is placed. Gladwell (2005) explained the importance of packaging in making purchase decision; he believed that customer perception about a product is based on the aesthetic element of package design. He furthers noticed that people do not make distinction between product and package, they treat it as whole. In his view, customer perception about a product is directly dependent on how he feel about package i.e for consumer product is mix of product and package. Gelperowic and Beharrell (1994) in their article “Healthy Food Products for Children: Packaging and Mothers’ Purchase Decisions” explain the power of package when it comes to children products. The result depicts that pester power can come from an attractive packaging and as a result it will influence heavily on consumer purchase decision. This behavior can be observed in the purchase of Disney-branded products. Rettie and Brewer (2000) in their article “The Verbal and Visual Components of Package Design” focused on the package design they purposed that if the content is written from right-hand side it will be better perceived by customers; it shows that perception is not symmetrical. He further state that in case of visual content it should be mentioned from left-side. The study shows that under conditions of rapid perception this technique of placement of content on the pack helps in recognizing or making the difference THEORATICAL FRAMEWORK A positive relationship exists between consumer perception about a product and its packaging and shelf placement. Here product packaging and product shelf placement is taken as dependent variable, which means if packaging is attractive or appealing and placement is right; consumer will perceive product as useful and got attracted towards it and, finally consumer will made a purchase decision. In case of in-store shopping, consumer will attend or respond to that stimulus which will be perceived by consumer from all the other environmental stimuli. So marketers and retailer will try to find ways by which they can get consumer attention; getting consumer attention is the prime purpose of marketer, as final purchase decision will be based on it. A schematic diagram of the theoretical framework is as follows INDEPENDENT VARIABLE DEPENDENT VARIABLE LIMITATIONS OF RESEARCH Limitations of the research are: Result cannot be generalized to a broad population. The number of participants involved in qualitative research study is too small to be representative of the population, as Focus groups or interviews session involve interaction with few dozen members of a target audience. Statistical analysis cannot be done with this kind of research as it does not collect numeric data from a representative sample of the target audience. The quality of the data collection and the results are highly dependent on the skills of the moderator or interviewer and on the rigor of the analysis. The skill and experience of the analyst also influence how well the data are summarized into themes and insights that are useful for subsequent program planning. FUTURE RESEARCH DIRECTION The research has opened a new dimension for the further in depth analysis of the factors on which marketers focus while targeting potential customers. Two factors highlighted by this research also need more input from other researchers, as more work can be done. This research can be carried forward by including or involving other variables like individual preferences about particular brand and seeing the psychological reasons behind it. BIBLIOGRAPHY 1. Bultez, A. and Naert, P. 1988. “S.H.A.R.P.: Shelf Allocation for Retailers' Profit”, Marketing Science, Vol. 7, No. 3, pp. 211-23. 2. Chiang, J. and Wilcox, R.T. 1997. “A Cross-Category Analysis of Shelf-Space Allocation, Product Variety, and Retail Margins”, Marketing Letters, Vol. 8, No. 2, pp. 183-191. 3. Cox, K.K. 1970. “The Effect of Shelf Space upon Sales of Branded Products”, Journal of Marketing Research, Vol. 7, No. 1, pp. 55-58. 4. Cox, K. 1964.”The Responsiveness of Food Sales to Shelf Space Changes in Supermarkets”, Journal of Marketing Research, Vol. 1, No. 2, pp. 63-67. 5. Curhan, R.C. 1973. “Shelf Space Allocation and Profit Maximization in Mass Retailing”, The Journal of Marketing, Vol. 37, No. 3, pp. 54-60. 6. Frank, R.E. and Massy, W.F. 1970,”Shelf Position and Space Effects on Sales”, Journal of Marketing Research, Vol. 7, No. 1, pp. 59-66. 7. Gladwell, M. 2005.Blink, Penguin Books, London. 8. Gelperowic, R. and Beharrell, B. 1994. “Healthy Food Products for Children:Packaging and Mothers’ Purchase Decisions”, British Food Journal, Vol. 96 No 11,1994, pp. 4-8. 9. Hill, H. and Tilly, J. 2002. “Packaging of Children’s Cereal: Manufacturers versus Children”, British Food Journal, Vol. 104 No. 9, 2002, pp. 766-777. 10. Kollat, D.T. and Willett, R.P. 1967 “Customer Impulse Purchasing Behavior”, Journal of Marketing Research, Vol. 4, No. 1, pp. 21-31. 11. Razzouka, N.Y., Seitza, V. and Kumarb, V. 2002. “The impact of perceived display completeness/incompleteness on shoppers’ in-store selection of merchandise: an empirical study”, Journal of Retailing and Consumer Services, Vol. 9, pp. 31-35. 12. Rettie, R and Brewer, C.2000. “The Verbal and Visual Components of Package Design”, Journal of Product and Brand Management, Vol. 9 No 1 2000, pp. 56-70. 13. Reinartz, W.J. & Kumar, V. (1999), “Store-, Market-, and Consumer-Characteristics: The Drivers of Store Performance”, Marketing Letters, Vol. 10, No. 1, pp. 5-22. Read More