DU SOL B.Com 3rd Year Marketing Management Notes Chapter 5 Product (Branding, Packaging and Labelling)

DU SOL B.Com 3rd Year Marketing Management Notes Chapter 5 Product (Branding, Packaging and Labelling)

Question 1.
What do you understand by Brands ? Distinguish them with Trade Marks. What considerations are taken in selecting an effective brand name ?
What are Brands ? Differentiate them with Trade Marks ?
Write a short note on ‘Brands and Trade Marks’.
Write a short note on ‘Characteristics of a good brand’.’
Meaning Of Brand:
In this age of competition every producer wants to capture the major share of the market. For the purpose, he wants that his product should be differentiated from that of his competitors. It should have different image so that it may attract a maximum number of customers, to have a different image, the producers determines a particular brand or brand name of the product sp that it may easily be identified by the consumers and may be demand with its brand name. He can get the brand registered so that other producer may not copy it. A brand name when registered is called trade mark.

“A brand is a name, term, sign, symbol or design or a combination of them which is intended to identify the goods or services of one seller or group of .sellers and to differentiate them from those of competitors.” (American Marketing Association – Marketing Definition : A Glossary of Marketing Terms), e.g., Lux Soap. Raja Toys, etc. Brand Name other terms resembling to brand are given below:

“Brand name is a part of a brand consisting of a word, letter., group of word or letters comprising a name which is intended to identify the goods or services of a seller or a group of sellers and to differentiate them from those of competitor.” (A.M.A.). In other words, a brand name consists of words, letters or numbers which may be vocalised or pronounced, eg., Plaza Locks, Usha Fans, Allwyn Refrigerators, Weston T.V. etc. They are duration of words used to identify a product and to differentiate it from ocher products.

Brand Mark.
“’A mark is the part of the brand which appears in the form of a symbol, design or distinctive colouring or lettering’: (William J. Stanton). It could be recognised only by sight but may not be pronouceable, e.g., Symbol of ‘Maharaja’ of Air India, design of two arrows for Delhi Transport Corporation.

Branding is the management process by which a product is branded. It is a general term covering various activities such as giving a brand name to a product,designing a brand mark and establishing and popularising it.

Trade Mark.
When a brand mark is registered and legalised it becomes a trade mark. Thus registerd brands are trade marks. In that sense w all trade marks are brands but all brands are not trade marks. Trade mark is defined as a “brand or part of a brand that is given legal protection because it is capable of exclusive appropriation.” – (Glossary of Marketing Terms – AM A). Thus, the trade mark is essentially a legal term protecting the manufacturer’s right to use the brand name or trade mark.

Distinction Between Brand And Trade Mark:
We have discussed the two terms above Now we shall make distinction between the two as follows :
(i) Trade Mark is used in the narrow sense while brand is used in broader aspect. Thus, trade mark is that part of brand which has a legal protection. In this way all trade marks are brands but all brands are not trade marks. Thus, trade mark is the registered name of brand. Brand may be registered or not. When it is got registered, it becomes a trade mark.

(ii) Brand denotes the qualities of a product whereas the trade mark denotes the producer. So, trade mark can be used with every brand.

(iii) Some businessmen use the same symbol or design or mark for their brands and trade marks but some others give different brands to their different products with the same trade mark.

Consideration in Selecting an Effective Brand Name Or Characteristics of a Good Brand. Branding is the management process by which a product is branded. It is general term covering various activities such v as giving a brand name to a product, designing a brand mark and establishing and popularising it.

The success of any product is determined primarily by the worth of that product in relation to the competiting products. But names are in one way a necessity for they serve to create identity. Identity is essential in competition because without a means of identification there is no way of making a choice. It is here that brand name enter the scene of marketing.

In selecting a good brand name various aspects require careful consideration. Very often manufacturers invite brand names from the consumers, dealers, and agencies. The following are some of the general considerations though not very hard and fast rule can be laid down.

  1. The name should readily come to the minds of customers. It should be easy to pronounce.
  2. The name should be easy to read and understand.
  3. The name should be appropriate for the product. .It must suggest something about the product.
  4. It should be easy to remember.
  5. It should as far as possible be most descriptive in nature.
  6. It should be different from other brand names.
  7. It should be got registered so that any other firm might not take advantage of its popularity.
  8. The brand name must be selected keeping in view the advertisement. It should be of the nature that it may be easily and effectively advertised.
  9. It should be short and pointing.
  10. It should be far from obscence.
  11. It should be economic so that it could be easily printed, embossed on packages.

The brand names, packaging, etc. are only ancillary things and the consumer is really influenced by the quality and performance of the product. Therefore, the success or failure of a product is determined primarily by the worth of the product in relation to those it competes with.

Question 2.
Explain different kinds of brand.
Attempt a short note on ‘Brand Classification’.
Kinds Of Brand:
For the convenience of study, the brands may be. classified as under:

I. According to Ownership.
On the basis of ownership, brand may be of two types :
(a) Manufacturer’s brand, and
(b) Middlemen’s brand.

(a) Manufacturer’s brand.
When brand is named after the name of the manufacturer of the product, it is known as manufacturer’s brand. For example, use of Phillips on all the products of Phillip’s Company like-Phillips Radio, Philips T.V., Transistor, Bulbs etc. is an example of manufacturer’s brand. Simlarly Godrej Company uses ‘Godrej’ as brand name for all its products such as almirah, detergent, soap, typewriter, refrigerator etc. This type of brand is very popular and most of the manufacturers use this type of brand.

(b) Middlemen’s brand.
Under this type of brand, manufacturer does
not use any brand for his product. Instead, distributors like wholesalers, retailers etc. sell the product underhis own brand. Actually, this type of brand is not popular in our country because we do not have large distributors like U.S.A. and U.K, etc. ‘ . . .

II. According to the Market Area.
According to the market area, the brand may be of the following five types ;
(a) Local brand,
(b) Provincial brand,
(c) Regional brand,
(d) National brand, and
(e) International brand.

(a) Local brand.
When brands is used for local market, it is called local brand. Under this type of brand, different brands are used in different markets.

(b) Provincial brand.
When one brand is used for a particular province or State it is called provincial brand. Different brands are used in different States for the same product.

(c) Regional brand.
Under this types of brand, manufacturer uses his brand name only in a particular region. Different names for different regions are used. Under this, the whole market is divided into different regions such as East, West, Norths South and Central legions etc.

(d) National brand.
When manufacturer uses his product’s brand for selling his product throughout the country, it is called national brand.

(e) International brand. When tire same brand is used for selling the product in all the countries of the World it is called International brand.

III. According to the Number of Products.
A brand may be of the following three types on the basis of number of products :

(a) Family brand.
When the manufacturer uses a single brand for all his products and in all market segments, it is known as family brand. For example, all the products of Bajaj Group are marketer with the brand name of Bajaj such as bulbs, tubelight, scooter, pin, toaster, table and ceiling fan, gyeser etc. Similarly Modi, Godrej, Phillips use only one brand for all their products throughout the country. This type of brand is more popular.

(b) Product line brand.
When the business or industrial houses use different brand names for their different product lines it is called product fine brand. For example, ‘Dalda’ is used for Vanaspati Ghee’product line and ‘Super Surf for detergent powder line by the same manufacturer is the example of product line brand.

(c) Individual brand.
When individual product is marked different brand names for the product, produced by the same manufacturer, is called individual brand For example, toilet so-ps produced by the Hindustan Lever Limited bear different brands for the different products in the same product line p.g. Lifebuoy, Lux, Lux Supreme, Rexona, etc.

IV. According to Use.
Under this category, brand may be of two types :
(a) Fighting brand, and
(b) Competitive brand.

(a) Fighting Brand.
When there is very’ tough competition in the market and the producer wants to introduce a new product which has quite a different characteristics from that of competitors brand and which gives a impression of such a difference, it is calLJ ?. fighting brand.. For example, 1TC Ltd. has recently introduced ‘Now’ brand cigarette.

(b) Competitive Brand.
When the brand introduced in the market is almost similar those of competitors, such a brand is known as competitive brand. For example, Modi Soap, Nirma Soap, 555 Soap etc. are all having similar characteristics.

Question 3.
(A) What are the advantages of branding.
(B) Is the use of branding socially desirable ?
(A) Advantages Of Branding:
The advantages’ of using brand names to different participants in the marketing viz. manufacturer, consumers, distributors etc. are as follows:

(a) Advantages to Manufacturers.
The following are the advantages of branding to the manufacturers :

1. Easy to Advertise.
Advertising of the product with brand name is very easy. The customer is influenced with brand name. He prefers to use the product with a particular brand name.

2. Easy to Identify.
Use of brand is Very helpful in the identification . of the product. Consumer recognises the characteristics of the product with its brand name.

3. Creation of Separate Market.
Popularity of brand creates a separate market for the product. It is because the use of a particular brand differentiates the product with those of competitors.

4. Easy to Expand the Product Mix.
If the brand of a producer becomes popular and the sales of his products as encouraging, he can decide to expand his product mix. He can add new product and product lines’ to his product mix. Producer will feel it easy to introduce a new product in the market. Demand creation of the new product is not difficult for such producers.

5. Personal Contact with Customers.
When the particular brand becomes popular, the producer may eliminate the middlemen or reduce the number of middlemen very, easily. He will, thus, come closer to the customer and the cost of distribution will also be reduced to a great extent.

6. To Get More Price.
When a brand becomes popular, the consumers begin to use it extensively, it is not very difficult to increase the prices of the product. The consumer will not mind a little increase in prices.

(b) Advantages to Middlemen.
Middlemen means different types of dealers – wholesalers, retailers etc. Which are in between the producer and consumers. Brand’ offers following advantages to such middlemen:

1. Easy to Understand Consumers’ Wants and Needs.
When a product of a particular brand becomes popular, the consumers ask the product with that particular brand. Thus, middlemen can easily understand the needs, wants tastes and preferences of the customers. Moreover, a middleman sells the product of a popular brand very easily.

2. No Need of Advertising and Sales Promotion.
As the demand of a famous brand already exists in the market and the customers ask the product by, brand name, there is no need for the middlemen to advertise for such product. Moreover, sales promotion techniques need little expenditure.

3. Less Risk.
As the demand of a popular brand already exists in the market, the middlemen have no risk in keeping the stock of the product. The amount already invested in such stock is recollected very soon by selling the product in the market, in addition to it. the prices of such popular products do not fluctuate very frequently. Thus, it reduces the risk of middlemen.

4. Increase in Sales.
Where demand of a particular brand is high, the sales of the enterprise also increase substantially, because the market of such product already exist.

5. Increase in Goodwill.
With the popularity of the product, goodwill of the producer also increases.

6. Increase in Profits.
As the goodwill of the business and the product . increase, the demand of the product also increases. The profits of the firm will increase with the increase in the sales of the produce.

(c) Advantages to Customers.
Following are the main advantage? of brand name to the consumers :

1. Easy to Recognise.
Consumers of the product recognise the company’s products very easily because all products of the same brand have similar packages, design, etc.

2. Availability of Quality Products.
The consumer, is rest assured that quality of the product is good, because producer wants to increase the sales of his product. Moreover, the producers, who use a particular brand for their products, always keep them busy in improving the product quality. Thus, its quality gets on improving day by day and the consumer also gets better quality goods.

3. Minimum Fluctuation in Prices.
The prices of popular brand do not fluctuate much, therefore, it brings certainty in prices.

4. Mental Satisfaction.
The proverb that ‘first impression is the last impression’ L true in case of brand. The mental state of consumer in the beginning when he used the product of the company for the first time, gave the permanent impression of the product. If at that time, product was of good quality and the consumer was satisfied with its quality: He thinks the product he is using is of good quality and he is paying reasonable price for the product.

5. Improved Packing.
The packing of a good quality product is also of high quality. The name of the brand and that of the producer is printed on the packing itself.

(B) Is Branding Socially Desirable ? or Arguments Against Branding:
The severe criticism against branding is that it leads to some kind of monopoly known as brand monopoly. The brand monopoly is created by creating brand loyalty to the products in the minds of consumers. Due to brand monopoly, consumers are exploited and makes them irrational in making their selections.

The criticism is baseless since such situation is not possible in the case of consumer goods unless they are really necessary items. When a monopolistic tendency is .fou 4 consumers will show a response to it by changing the brand.

Brand names do not always assure good quality. Manufacturers sometimes place inferior goods in the market under a glamourous brand name and it generally happens when brand name becomes popular in the market.

On the basis of above criticism, one should not, conclude that the brands are socially undesirable. If we compare its advantages and disadvantages, we may confirm that its advantages are much more powerful, though its criticisms are not quite baseless. If certain legislative measures are taken to improve the situation, brand name may prove useful to the consumers.

Question 4.
Discuss different kind of brand names.
Kinds Of Brand Names:
Branding is a process by which products are named.These names . . should reflect certain aspects of the products or the manufacturel. On this basis the brand names could be divided into :

  • Coined Name.
    A purposely created name but stress is more on
    producer’s identity. For example, the word ‘Black word’alone is meaningless unless attached to ‘pen’.
  • Arbitrary Name.
    A name neither relating to product nor the manufacturer.
  • Suggestive Name.
    A name which suggests something, about the product or its functions, e.g., ‘Band Aid Sticking Plaster’, Keshvardhini Hair Oil, Deodorant.
  • Descriptive Name.
    A name that describes fully the product, e.g., Glucose Biscuit, Cocoa Sweets.

Question 5.
Explain the following.
(a) Family Brand vs. Individual Brand.
(b) Brand Testing.
(c) Brand Image and Product Image.
(A) Family Brand VS. Individual Brand:
When a company sells more than one product, it must decide whether to sell each under a separate brand or to use a family brand. Marty situations exist where greater returns can be realised through making one, choice rather than the other. Such decisions require evaluation of three factors :

  1. Nature of the product line,
  2. Promotional policy, and
  3. Desired market penetration.

The nature of the product line is the most important. Similar products are naturally related in consumer’s minds such as sheets and towels benefits particularly from family branding. Favourable reaction to one item often leads buyers to buy others in the line.

But this ‘Halo’ effect can also detract from a marketer’s reputation,if unfavourable experiences with one item turn consumers against the whole line. Particular care must be taken, that all items carrying the family brand conform to consumers’ standards of acceptance.

Products lacking common marketing attributes are usually best marketed under individual names, since little benefit comes from jointly associating them. There may even be adverse sales reactions from family branding such as food and food.stuffs sold at one association handicaps the food consumers because of the soups unpleasant taste.

All products do not lend-themselves to sale under a family brand. The quality of family brand products should be very nearly similar So that no single Item in the line can lower the quality reputation of others. The products should also be fairly compatiable.

With the change of perfume in soaps people do not prefer the changed perfume. But perfumery applies the same, scents to the soaps under the same label. The product should be sold to the same market. Family brand does not take to gains if an article is sold to industry and the other with the same brand to consumers. Here individual brand should be used.

(B) Brand Testing:
Once a brand is used, it becomes an integral part of the product. Mostly brands are used for consumer goods but often industrial goods also have them. The relative significance of branding is for enhancing the products saleability. It is, therefore, very essential for the producer to known before launching a brand of product into the market whether it would succeed or not. For this purpose brand testing is done by the manufacturer.

(i) Memory Testing.
Under this, a selected group of persons are asked to remember certain names or symbols. After sometimes, they are asked those names. Most of them forget the names or symbols. By a careful study of this kind, it can be known easily which names can become popular. On the basis of such a study the name of the brand or symbol can be selected.

(ii) Preference Test.
Under this test a list of names or symbols is presented before’ a selected group of persons. Then they are asked to rearrange the name in order of preference. The name which scores the highest preference by the persons is chosen from brand name.

(iii) Learning Test.
Under this test a group of persons is given a list of possible brand names. Then they asked to pronounce and write the name – of the different brands. The name which is pronounced most easily and written correctly is generally chosen, for the brand name.

(iv) Association Test.
Under this method, some names are read out before different persons or they might be shown the names written prominently. Then they are asked to write down the name which comes first easily to their memory. The name which scores the first position and is written by the majority of persons is chosen for the brand name.

(v) Unique Test.
Under this test, a group of persons is first given the proposed brand name of the product. Then they are asked to write similar names resembling the proposed brand name .of the producer. By this test the producer can. easily understand by which other brand names his own brand name could be confused by the persons. Keeping in view the point, he can select and modify his own brand name.

In this way other test can also be evolved to .make the final selection of a brand. It is a delicate job and no hurry should be made in selecting the proper brand name.

(C) Brand Image And Product Image:
Every brand image is partially desired from a product image. The product image relates to the fundamental aims and satisfactions which the consumers find in a particular product. Therefore, it is not wrong to say that the brand image relates to the specific versions of the product image.

It should be remembered that the consumers can not be, misguided by a glamorous brand name. Ultimately the consumers judge a product by its quality and not by its name. Brand image and product image must conform to each other in the long run. Once a manufacturer has decided to introduce a new product, he will want to give his product an identity viz. a brand name. This is sometimes more different than naming a human child because of the legal and marketing considerations peculiar to products.

Question 6.
Explain chief branding policies ‘and strategies found in business and industry.
Chief Branding Policies And Strategies:
There are three branding policies and strategies e g.
(I) Brand policies and strategies adapted by the manufacturers;
(II) Brand policies and strategies adapted by middlemen; and
(III) Other brand policies and strategies.
These have been-explained as under :

I. Brand Policies and Strategies adapted by Manufacturers :

1. Marketing under the own Brand of Manufacturer.
Under this policy and strategy the manufacturer sells all his products under the brand
name of his own. He chooses a brand name for all his products. There are various policies under this category and the producer may select any of them. Main policies under this category are:

  • Individual brand,
  • Family brand,
  • Product line brand,
  • Local brand,
  • Provincial or state brand,
  • National brand,
  • International brand,
  • Fighting brand,
  • Regional brand, and
  • Competitive brand.

These brands have been fully explained in Q. 2.
This policy and strategy is useful in the following cases:

  • It increases the goodwill of the manufacturer,
  • It facilitates in the implementation of advertising and sales promotion programmes of the enterprise,
  • It brings stability in the prices of the products,
  • It helps in controlling activities of the enterprise,
  • It helps in adapting suitable policy regarding product mix of the enterprise.

The main disadvantage of this policy is that middlemen do not find any existence of their own.

2. Marketing under the Brand of Middlemen.
Under this policy and strategy, the manufacturer does not use any brand name for his products. He sells his products to the middlemen without any brand name. Here, middlemen are free to use any brand name selected by them for the products purchased , by them.
Main advantages of this policy are :

  • The manufacturers do not concentrate on marketing of goods;
  • Manufacturer simply concentrates on producing the best quality goods at reasonable cost.

Main disadvantages of the policy are :

  • Manufacture depends upon the marketing policies and programme adapted by the middlemen;
  • The middlemen may purchase goods from other manufacturers, if they agree to
    sell their products at cheaper rates. It unnecessary creates competition among manufacturers;
  • If the middlemen do not take interest in marketing the products or are not efficient it will leave the producer in a very critical situation.

II. Brand Policies and Strategies adapted by Middlemen:
It includes the following two policies :

1. Use of Brand of Manufacturer only.
Under this policy, the middlemen sell the product under the brand name decided by the manufacturers. They do not use any independent brand name.
Main advantages of this policy are :

  • Middlemen need not make any special efforts for marketing the products,
  • Middlemen get full advantage of manufacturer’s goodwill
  • If increases the sales 01 the middlemen.,

Main disadvantages of this policy is that middlemen do not have, any existence of their own.

2. Using two Brand Names.
Under this policy, the middlemen sells products under two brand names – products of the brand of manufacturer and products of their own brand name. The same product is marketed under two brand names.

Main advantages of this policy are :

  • Middlemen feel their own existence,
  • It increases the sales of the product very high because of the use of brands of both the manufacturer and middlemen,
  • The middlemen get full advantage of goodwill of the manufacturer and of his own goodwill.

The main disadvantage of this policy is that the policy is not appreciated by the manufacturers because they feel that the middlemen will concentrate upon the sale of their own brand and will not take full interest in marketing 1 the manufacturer’s brand.

III. Other Brand Policies and Strategies:
Other brand policies and strategies’are :

  1. Multiple Brand Policy.
    Under this policy, the manufacturer uses 1 different brands for his different product items.
  2. Product Line Brand Policy.
    Under this policy, manufacturer uses one brand for each product item in. the same product line. Thus, different brand names used for different product lines.

Question 7.
Define the Packaging and explain its functions.
“The main objectives of packaging are protection, brand differentiation and identification, sales promotion and handling- convenience.” Explain.
Write note on Role of Packaging in Marketing.
Write short note on Packaging.
Packaging – Meaning And Importance:
A good package is the representation of the artistic combination of the designers creative skills and the product and marketing and sales knowledge of the manufacturer’s management team. The development of packaging is the sum total of the talents of the designer, the researcher, the technician, the advertising man, the marketing expert, the sales department and the top management.

At times, it may include in the team, the use of packaging committee and packaging directions, the role of independent designers and the delegation of market research in the solution of packaging problems.

“Packaging may be defined as the general group oj activities in product planning which involve designing and producing the container or wrapper for a product.” (William J. Stanton : Fundamentals of Marketing). Packaging is a brand activity that requires careful consideration by the management.

The potentialities of packaging especially in the field of demand creation have been widely accepted now. If is often remarked as a ‘silent salesman’. This is perfectly so because of its advertising appeal, identifying power and intrinsic value.

Vernon L. Fladager in his article ‘Packaging as a Marketing Tool’ explains its importance in the following words: “Under the modern marketing concept, in which all aspects of a business are corrected from a market point of view to enhance their ability to win profitable customers, packaging decisions almost always .have complex ramifications. Any such decisions may simultaneously affect production, distribution research and development, sales advertising, public relations, personnel accounting and finance.”

Here packaging should be looked upon both as a ‘thing and a person’ or step by which a company is economically able to contain man made or natural products for shipment, storage, sale and final use.

The capability of packaging as.an effective selling tool was proved in the case of liquor industry. For example, packaging of two bottles together in one container resembling a mail box attracts attention and encourages the seller because he can sell two bottles instead of one.

Functions of Package or Purposes or Importance of Packaging.
Tide basic function of any package is to protect its contents in transit, in storage and in use. Breakage due to rough handling is only one aspect of protection. Equal attention must be given to wastage from other causes. Foremost among these are moisture, fungus, insect and exposure to sunlight. But today packages perform large and increasing variety of functions. Some of these functions are the following :

  • To assemble and arrange the contents in the. desired form.
  • To protect the-contents from production time to the final use.
  • To identify the contents, the brand and the maker (Product differentiation is perfected through this function).
  • To provide a suitable product mix including sizes, weights, prices, grades, and packages.
  • To facilitate retailer’s functions. He can store and sell the goods easily.
  • To facilitate transporting; storing and warehouse handling.
  • To enable the display of contents on packages.
  • To encourage the customers for repurchases.
  • To help in complying with legal requirements.
  • To provide opportunity and space for advertising.

According to Philip Kotler, “Protection. convenience and economy i ‘ were the three important traditional purposes attached to package.”
These three traditional functions have been explained as under –

(a) Protection from Various Kinds of Damage : This is the
fundamental function of packaging. Product need production till it is finally consumed. Packing protects the products -Tom various types of damages like:

  • Damage by mechanical handling.
  • Product loss-powder, oil, petroleum products are lost if remain exposed.
  • Pilferage.
  • Contamination by dirt or dust, e.g., clothing.
  • Moisture gain or loss, e.g., cement, sugar.
  • Chemical change, e.g., metal corrosion.
  • Insect attack, e.g., moths in warm garments.

(b) Convenience :
Packing provides convenience in distribution and storage of goods in the following ways :

  • Storage convenience in warehouse, shop or house. Property packed goods require less space. ,
  • Convenience in use.

(c) Economy :
A good package of product brings various types of economy, such as –

  • Loss in quantity is prevented avoiding monetary loss.
  • Provides opportunities for re-use.
  • Creates an opportunity to communicate with the customers.

A fourth objective or function has now received increasing attention and recognition from manufacturers particularly those in the consumer’s field. This is designated as promotional function.

(d) Promotional Function of Packaging.
The factors responsible for giving promotional dimension to packages are :
(i) Self-Service.
The package itself is capable of performing many of the sales tasks. It attracts attention, describes the producer’s features, gives the consumer confidence and makes a favourable overall impression.

(ii) Consumer Affluence.
Prestige of a product is maintained with the help of proper packaging. Good packaging is capable of projecting various qualities of the product as well as the manufacturers.

(iii) Integrated Marketing Concept.
Brand names now occupy a dominant’ role in marketing. The brand names are popularised through advertisement. But the reminding of brand names and making a brand acceptable to customers is achieved through proper packaging. Packaging must therefore, support and reinforce the brand identity the company is trying to build.

(iv) Innovational Opportunities.
Packaging is capable of bringing large scale gains to manufacturers through innovational efforts. A manufacturer uses new packaging to attract the consumers. Thus, it helps in increasing sales.

All these functions prompt the manufacturers to take increased interest –
in packaging. Now packaging also occupies an important decision making area under new marketing management. A state has reached where the companies base their whole advertising compagin on the merits of their packaging rather than that of their products.

Question 8.
Discuss different kinds of packaging. What are the different kinds of materials used in packaging?
Kinds Of Packaging
kinds or methods of packaging will depend largely on the nature of the contents in terms of their value, physical, composition and durability.The length of the distribution channel, the amount of handling which the container will receive and variations in climatic conditions which may be encountered between the point of manufacture and sales and also to be taken into account. Liquid products require containers made of glass or similar materials. For handling fragile articles wooden containers are used.

Classification of Packaging.
There are five types of packaging :
1. Transit Packaging.
Transit packaging is that kind of packaging which keep the product safe from production to consumption in the process of distribution. It is also known as ‘distribution packaging’. Materials used for this type of packaging are wooden containers, drums, tins, sacks, etc. The main stress under this type of packaging is on safely.

2. Consumer Packaging.
Consumer packaging is that kind of packaging which is used for delivering the goods to consumer. Materials used for this purpose, a bottle of glass or plastic, Iron box, polythene bags etc. Packaging must attract the customers.

3. Family Packaging.
The products of a particular manufacturer when packed in an identical way is known as family packaging. The shape, colour, size, etc. of packaging are similar for all his products. Family brands are made meaningful by using family packaging also. In such cases packing methods, materials used for packaging, the appearance etc. will be one and the same for all the products of a manufacturer.

4. Reuse Packaging.
Packaging that could be used for some-other purposes by the consumers after the packed goods have been consumed is known as re-use packaging. For example, containers of ghee, oil, biscuits. coffee, etc. These packagings are made of glass, plastic, hard board etc. This aspect increases the sales value of the product considerably.

5. Multiple Packaging.
It is the practice of placing several units in one container; This helps to introduce new products and increase the sales. This is mainly used by consumers.
The various aspects of packaging are now treated as a management activity.

Kinds of Materials Used for Packaging .

  1. Earthenware.
    It is an old method of preserving products of liquid nature. Even today hot drinks as liquor are kept in containers for improving the quality.
  2. China Jars.
    They are used where protection is required against light and corrosive action.
  3. Wooden Boxes.
    They prevent breakage due to rough handling of fragile products.
  4. Cardboard Containers.
    They are also known as corrugated paper boxes. These are mostly used in speciality goods which are not bulky.
  5. Straw Baskets.
    These are meant for keeping vegetables.
  6. Gunny Bags.
    Used for packing gains.
  7. Glass.
    It is used in the form of bottles of different shapes.
  8. Tin Containers.
    These are used for packing liquids like oil and ghee;
  9. Plastic Containers.
    These are becoming most popular due to their low cost, good appearance, convenience and ability for re-use.

For designing a package AIDAS formula is used. This represents five essentials as follow: A -Attention; I – Interest; D – Desire; A – Action; S – Satisfaction.

Question 9.
What factors would you keep in mind while taking packaging decisions?
Factors Affecting Packaging Decisions:
Packaging decision means decision in respect of packaging of a product, the following four considerations are important in this respect;
1. Packing Design.
The first consideration in making packaging decision is in regard to the design of the packaging. It includes the following considerations :

  • Which types of material should be used for packaging?
  • What should be the design of the packaging?
  • What colour should be used?
  • What matter is to be printed on the packaging?
  • What should be brand name or trade mark on the packaging?

In addition to the above considerations, convenience of consumers and middlemen, cost of packaging, nature of product, size of packaging, legal restrictions etc. should also be considered L details. The design of packaging should be such that facilitates the activities, of storage, transportation and distribution etc.

2. Package Size.
The second consideration in packaging decision is the size of the packaging. The size of packaging differs from product to product and from producer to producer, taking size and nature of the product, the quantity generally purchased by consumers into consideration, As consumers purchase a product in different sizes, it is advisable to the company to pack the product in different sizes.

3. Package Cost.
While taking decision on packaging, its cost which is to be added to the cost of the product Should also be considered. For such purposes, its protection value, and convenience should be the prime considerations.

4. Package Test.
When all the above points are finalised, the next step is to test the packaging so that it may be assured that the package will meet the consumers’ requirements. There may four types of test for this purpose :

  • Technical Test.
    Technical test is carried out with the purpose of lasting the design of packaging whether it is proper or not for the safety of product.
  • Middlemen Test.
    Under this test packaging is tested keeping its suitability to middlemen.
  • Consumer Test.
    Consumer test aims at testing the package keeping in view the consumers convenience i.e., whether it will be liked by the consumers or not.
  • Appealing Test.
    Appealing test is the test to see whether packaging appeals or it looks attractive or not. If the packaging crosses the above four tests, it is approved finally and if it fails in any of the above tests it is either disapproved or it is improved further.

Question 10.
Explain different packaging strategies. Which are used by a concern for promoting sales of its product
Packaging Strategies:
Product package plays an important role in promoting sales.- Promotion is a short term special measures to boost sales of a specific „ product. The following arc important promotional packaging techniques :

1. Money off Pack.
A ‘flash’ in distinctive colour is superimposed on the package the special price discount being offered. This is the most widely used strategy.

2. Coupon Pack.
Under this strategy a coupon of certain value, either as a part of the package or placed separately inside the package is attached and is redeemed by the producer through retailers after the purchase of the product.

3. Pack in Premium.
A premium i.e., a gift is packed inside the original product package under this strategy viz. a handkerchief in a cosmetic product package or a tooth brush packed inside the tooth paste pack.

4. Premium Package or Re-use Packaging.
A specially made package having either are-use or prestige value is referred to as premium package. Under this strategy, a special package is offered to the consumer along with the product either as a part of the product or separately, Double Diamond Tea is offered in Pearl Pet jar (a re-usable jar) is an example of first type. The set of audio cassettes of Tagore songs released by the Gramophone Company of India in 1986 which is presented in a specially designed wooden box is an example of second type.

5. Self-liquidator.
Under this technique, the buyer has to send to the company a fixed number of packages or a part thereof e.g. empty foils, wrapper or cartons as an evidence of purchasing the goods. In return, the buyer may purchase additional product at a reduced rate or be rewarded a different product. Several companies in India in the processed food and beverages industry occasionally use mis technique. Soap industry also use this technique very often.

6. Changing the Package.
Introduction of a new package can also be used as promotional technique. This technique is beneficial when a new packing materials is introduced in the market. For example, till the very recent past, edible oils were packed in tin cans in India which looked shabby and dirty.

Most of the modem firms have now strated using transport one litre PET (Polyethylene Terephthalate) bottles which look shine, gleaming and fresh. Companies are using the change of packaging quick effectively an additional element i.n their advertising campaign.

7. Odd Size Packaging.
Packaging can also be used ingenuously to avoid direct price comparison with the competing products. Under this strategy, the size of the package is quite different from the standard size used in the industry. A recent example in India is the case of Maggi Ketchup. which was introduced in the market in 400 grams bottle while industry-
wise standard was 500 grams bottle.

8. Packaging the Product Line Family Packaging.
When the producer – uses identical packages for all the products in the same product line is known as family packaging. Under this technique, identical packages or packages- with some common features are used for all the products of a product line.

This type of packaging is widely used by the producers of consumer goods and generally by the producers of large number of items in a particular product line. Under this strategy, when new products are added to; a line, promotional value associated with old products extend to the new ones. Examples of this type of packaging is packaging of shoes, canvass shoes, chappals, Hawai chappals mainly by producers of repute such as Bata, Relaxo, BSC, CSC, Sona, Liberty etc.

9. Mutiple Packaging.
Under this strategy, more than one unit of the . same product is placed in one container or packaging. This strategy increases the sales to a large extent. This technique is generally used by retailers. For example, toweis, pen, pencils etc.

In short, any of die 4boye packaging strategy may be used by the producer as promotional packaging strategy:

Question 11.
What do you mean by Label? Explain different types of labels.
Meaning And Definitions Of Labels:
Label is also important in marketing a product. A label provides all the important information to the consumer about the product and the producer. The important information provided by a label is the name of the product, name of the producer, quality of the product, contents inside the package, weight, date of production, batch and lot number, expiry date and important instructions for the use of the product.

The label is a slip affixed anywhere on the product giving important informations about the product and producer to the consumer; Any legal requirement can be evidenced from the labelling. The Packaged Commodities (Regulations) Order, 1975 makes it obligatory on the part of manufacturers to show details about the identity of the commodity, its weight, date of manufacturing, batch and lot no, etc. The provision of this enactment is carried out with the help of labelling.

William J. Stanton has defined the label as “The label is that part of the product which carries verbal information about the product or the sellers (manufacturers or middlemen). A label may be part of the package or it may be a tag attached directly to the product.” According to Mason and Rath,“ The lable is an information tag, wrapper or sea! attached to a product br product’s package”.

Thus, a label is a chit or tag giving full information about the product and the producer. It is a part of the package (printed or pasted on the package).

Kinds Of Labels:
The labels may be classified into three types – brand, grade, and descriptive.
(i) Brand Label.
This is the label which gives the name of the brand of the product only. They are exclusively meant for popularising the brand name of the producer. Taj Mahal Tea, Dalda Vanaspati are examples of this type of labels. This type of label is the part of the package of the product. Such labels do not provide any information about the product. Manufacturer of consumer items prefer to use this type of labelling.

(ii) Grade Labels.
When a manufacturer produces many types of a product, he uses the label describing the type of the product i.e., quality or grade of the product so that consumers and middlemen may identify the type of the product This type of lable is known as grade labels – Dust Tea, Leaf Tea, Tea Bags, Long Cloth, Prima Fan, Delux Fan etc. are examples of grade labels. This type of label does not provide any information about the product and the producer.

(iii) Descriptive Illustrative Label.
These labels are descriptive in nature. They are almost illustrative. They provide full information to consumers out the product and the producer. This type of label also gives all the inecessary information such as date of manufacturing, date of expiry, quantity of the product, quality of the product, contents of the product, and necessary instruction for the use of the product. Such labels are mainly used in medicines, cosmetics.

Question 12.
What do you mean by standardisation? Describe its classification, advantages and disadvantages.
Meaning Of Standardisation:
Standardisation is an important part of marketing, process. It means the determination of basic characteristics of a product on the basis of which, the product can be identified and grouped. It determines the shape, form or quality of the product and all the units of the product confirms to such standards with respect to quality, size, utility, form, colour etc,

Tousley, Clark and Clark have defined the term standardisation as, “Standardisation is the general ierm which included the establishment of standards for products, the inspection of products in order to determine the standards to which they confirm and where necessary, the sorting of product into lots confirming to established standards.”

On the basis of the above definition, it can be concluded that standardisation is a process which includes three activities:

  1. To determine the standards for the product to be produced,
  2. To Inspect the products or the basis of pre-determined standards, and
  3. To divide the product, according to standards into different groups. Thus, standardisation is the the problem of establishing standards, maintaining and providing continuity to them.

Classification of Standards:
1. (a) Positive Standards.
The standards which express positively the qualities present in the product.
(b) Negative Standards.
The standards which express positively the qualities absent in the product.

2. (i) General Standards.
They relate to all similar commodities no matter who produces them.
(ii) Private Standards.
Standards are private when an individuals manufacturer limits or prescribes certain standards for his products, c.g., Terene for clothes is a general standard and Liberty Shirts a private standard.

Standardisation is thus the process which a standard already decided is attained. It involves the determination of basic measures to which articles must confirm. Standardisation is considered to be a facilitating or ancillary function of marketing. It helps in the efficient performance of the various marketing functions particularly buying and selling. A technical standard is the one adopted for production process and usually specifies what and how. An operative standard deals with the human element and specifies who, when and why.

Advantages of Standardisation.
According to Duddy and Revzan, “As long as no objective standard prevails there is opportunity for the strong to take advantage of the weak, for the clever and unscrupulous to outwit unwary and trusting.” Standardisation offers a number of advantages :

1. It helps to protect the products in transit from damage and reduces the cost of marketing by achieving economy in freight and handling.

2. Standardised goods require less storage area. This reduces storage charges.

3. The comparison of values different qualities of product in a single market and the differences in price of the same grade in different markets can be made. Such comparisons help keeping prices in the different markets in line with each other.

4. Sale by description or by sample becomes possible because all units of the product are homogeneous in all respects. The consumer is convinced to the quality and characteristics of these products on inspection or simply by description.

5. It helps to reduce risks and aids financing. Standardised goods could be evaluated accurately which facilitates financing.

6. It helps to remove the elements of speculation.

7. Standardisation and grading enable the manufacturers to use the brand names effectively. All units of the brand are similar.

8. Advertising backed by standards is more effective. It helps in the demand creation function also.

9. Manufacturers of standardised goods get advantages of standardisation. It increases their goodwill. It brings savings in the field of production because large scale production is possible. Distribution, advertising and sales promotion also get large scale economies. Thus, expansion of market becomes possible. Standardisation enables the producers to fix the prices of their products very competitive and reasonable.

Standardisation is effective only when it is legalised. In India many cf the manufactured goods have been .and more are being brought under standardisation with the establishment of Indian Standards Institution (ISI) in 1947. AGMARK is a standardised grade name for agricultural products. AGMARK is now attached to more than 50 commodities and covers nearly 275 items. In AGMARK, AG denotes agriculture and MARK stands for Marketing Grading.

Question 13.
What do you mean by Grading? What is the importance of grading in the process of marketing? Explain the problem of standardisation and grading in India.
What Is Grading ?
Grading means sorting out the product in homogeneous groups on the basis of their common characteristics such as size, quality, colour, or type. Grading actually starts where standardisation ends. Standard determines the quality of products whereas grading divides the product into uniform group according to certain standards of size, colour, shape, etc.

Tousley, Clark and Clark have defined the term as, “To grade is to divide into lots which have approximately the same characteristics as to type, size or quality that is to sort products into the standards grades to Which they belong.”

Grading actually is needed where production cannot be of standard quality viz. agricultrual products, mineral products, raw materials etc. Because they cannot be produced in standard form or quality, they need grading. The industrial products generally do not need grading problem because they are produced on some predetermined standards. Grading helps in marketing the goods. It also helps in achieving better price for the product because different prices may be fixed for different grades.

Advantages or Importance of Grading.
Grading is important in marketing activities. Important advantages are :

1. Helpful in Selling.
Marketing of graded products is very easy because all the units of the grade are uniform in all respects and consumers prefer graded items. They can be sold on the basis of samples or description.

2. Large Scale Production.
Because of grading, the demand of the product increases and therefore, the producer produces the product at large scale and he get large scale economies.

3. Future Controls.
As grading is made on some pre-determined Standards which are always the same. Identification of graded product is very easy. Future contracts may be entered into for the purchase and sale of the products.

4. Reasonable Price.
Quality of graded product is assured. For the r producer, it provides a reasonable price for the product. For the consumers, it provides standard quality goods at reasonable price.

5. Helpful in Financial Management.
Standardised graded products can easily be accepted as collateral security for the borrowings taken from banks and other financial institutions. It is because there is least variations in standardised graded products.

6. Claim for Damages.
Standardised goods are easily evaluated and thus, collection of claims against the railways, warehouses, insurance companies for the loss or damages becomes easy.

7. Widens the Market.
Grading widens the market in two ways :

  • graded products can be sold by sample and/or by description. Inspection of goods is not necessary;
  • It renders the distribution of goods easier at all stages. Goods can be ordered by telegrams, telephones, etc. for future delivery easily.

Problems of Standardisation and Grading in India.
Standardisation and grading really help in maiketing the product and fixing a reasonable price of the product. These techniques are vary helpful in inu easing the demand. But unfortunately, thv.se techniques have not been fully develop in our country, t here are a number of problems in the way of development of these techniques. The main problems are:

I. Lack of Public Consciousness.
This is the most important problem in the development of standardisation and grading. The consumers in our country are not aware of the importance of development of standardisation and grading. The difficulty is because of
(a) illiteracy,
(b) low standard of living,
(c) habits of bargaining,
(d) lack of information,
(e) dominance of rural population etc.

2. Lack of Facilities.
In India, facilities for the development of standardisation and grading are lacking. For this reason, many industrial enterprises do not indulge in this task.

3. Lack of Standards and Grades.
For most of the products, standards and grades have not been developed in our country. Only a limited number of standards have been developed.

4. Misuse of Standards and Grades.
Unscrupulous manufacturers generally misuse the standards and grades. It has been the experience that many manufacturers use the standards though they are not authorised to do so. While on the other hand, there are manufacturers who are authorised to use standards but they do not use those standards.

5. Lack of Testing Facilities.
Lack of testing facility is also a great problem in the development of standardisation and grading. Manufacturers – and traders feel difficulty to get these standards and grades tested. The testing facilities are still not available in the Bureau of Standards.

Question 14.
Write a short note on standardisation and quality control.
Or „
Explain the organisation, functions and progress of Bureau of Standards (BIS).
Standardisation And Quality Control:
An industrial conference was organised in 1940 in which a number of industrialists participated. It strongly recommended the setting up of an organisation to determine the standards of the product. The suggestion was overlooked at that time. In January 1947, the Government of India established the Indian Standard Institute (IS!) under the Industrial Development Plan. The main functions assigned to this Institute were :

  • To determine standards for different products at national and international level;
  • To give suggestions in respect of products of high quality;
  • To simplify the standards;
  • To develop competitive feeling for promoting sales of high quality products;
  • To conduct research and experiments in the field of standardisation;
  • To check new products and determine a standard mark for them;
  • To collect necessary data, and
  • To make the standards popular.

In 1952, Indian Standards Institute (Certification Marks) Act was passed empowering the Institution to test the quality and characteristics of agricultural products and to mark them with the mark of‘AGMARK’. It was also empowered to give the power to the manufacturers of quality products to use the mark ‘959’.

In export field, the Government of India had launched a scheme under which exporters are allowed to export goods only of quality prescribed by the Indian Standards Institute (ISI). The objective of the scheme was to ensure the quality of goods to be exported. TI\e ISI had close liasion with national standard bodies of all other countries.

It is closely associated with International Standards Organisation (ISO) and International Electro-technical Commission (IEC), both in their technical work and in their policy planning. ISI had also been imparting training to large number of standard engineers of developing countries under the various following schemes.

Bureau Of Indian Standards (BIS)
The Indian Standard Institute (ISI) was merged with the Bureau of Indian Standard (BIS) established under the Bureau of Indian Standards Act, 1986 and all the activities of ISI, and its assets were taken over by the new Institute (BIS).

The: main functions of BIS are:

  • To establish, publish and promote the Indian Standards for any article or process;
  • To recognised standards established by any other institutions in India or outside as Indian Standards;
  • To specify a standard mark to be called the Bureau of Indian Standards Certification Mark;
  • To grant, renew, suspend or cancel the certification mark;
  • To levy fees for the grant for renewal of the licence;
  • To establish, maintain and recognise laboratories for the purpose of standardisation and quality control;
  • To undertake research for formulation of Indian Standards;
  • To appoint agents in India or outside India for. inspection, testing etc. of standards; for coordinating activities of manufacturers or association of manufacturers.

Organisational Structure.
The Bureau of Indian Standards (BIS) is prime institution of national standards is engaged, inter-aliam the development of activities of standardisation, marking and quality certification. BIS has a strong network of offices for effective surveillance of certification and promotion of standardisation.

There is a large number of committees which are engaged in the formulation of Indian standards in different technological area and have an active support of Rs.40,0C0 technical experts as members of these committees. The task of formulating standards is organised through 15 technical divisions of the BIS.

BIS has a net work of testing laboratories fr- the formulation and certification of standards. Laboratories test the samples of the products. They test more than 40,000 samples per year. It also makes use of a large number of public and private laboratories in the countries for testing of samples. There are 21 State level Committees on standardisation and quality control, set up by the states and Union Territories.

The BIS has formulated 15509 standards up to February, 1992. The BIS has shifted it emphasis from national standards to international standards and has taken conscious decision to harmonise national standards with international standards. BIS certification scheme directed towards protecting the consumer interest and providing a catalytic effect on industries to come up to the standards has brought over 1350 items and around 7000 factories under its fold.

Items affecting health and safety of consumers have been enforced under compulsory certification. The number of licences in operation on the last day of February, 1982 were 11,842. The BIS is developing Indian standards covering important segments of economic activity and in serving the Industry in upgrading their quality. The Government purchases the items which have certification mark.

India has also joined the International Certification Quality Assessment System for electronics components and system for confirmity testing to standards for safety of electrical equipments to give boost to exports. Components or equipments certified under these systems need not to test and inspect again a.id can be sold in any part of the World.

Since quality system, a new system is gaining momentum in India and the World over, and is a vital step towards improving quality at enterprise level and increasing international competitiveness, BIS has introduced quality system certification in the country.

Government has introduced Rajiv Gandhi National Quality Award for excellence in quality. It is operated by BIS. BIS organises programmes on company standardisation, implementation conferences, industry-wise conferences and educational utilisation of standards. About so such programmes are organised in a year.

Though BIS has done well in the field of standardisation and quality control but still a lot is to be done.

Question 15.
Write a short note on ‘Standards of Weights and Measures.
Standards Of Weights And Measures:
In 1956, the Government of India passed the Standards of Weights and Measures Act, 1956 with a view to check the malpractices in weights and measures. Under this Act uniform standards of weights and measures based on metric system were established.

Standards as laid down in the Act have been adopted by States and were enforced in accordance with the provisions of the law. The Weights and Measures Unit in the department of Civil Supplies is the model agency for implementing all provisions and carrying all activities in this connection.

The Weights and Measures Act 1056 was replaced by a new Weigh. and Measures Act, 1976 in order to establish international system of units, to align our laws with international practices and to remove certain deficiencies. The main characteristics of the new Act, is providing for the regulation of packaged commodities. The provisions of the Act and the relevant rules, namely the Standards of Weights and Measures (packaged commodities) Rules, 1977 came into force from September, 1977.

According to these rules, the every package intended for retail sale must carry the following information on the package :

  • name of the commodity,
  • name and address of the manufacturer,
  • packager,
  • net weight of the contents, when packed,
  • month and year of manufacturers,
  • date of expiry where applicable,
  • sale price at which the commodity is to be sold in retail. Mandatory

DU SOL B.Com Programme 3rd Year Marketing Management Notes

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