Paradigm shift in packaging, Study Guides, Projects, Research of Marketing

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CENTER FOR MANAGEMENT STUDIES,

dIBRUGARH UNIVERSITY

PARADIGM SHIFT IN

PACKAGING

4/4/

SUBMITTED BY:

JAGRITY PHUKAN ()

LEENA DUARAH (23)

PALLAV JYOTI GOGOI (34)

SWAHIN SULTANA ()

VISHAL DEY (60)

TABLE OF CONTENTS

• History
• Modern day packaging
• Types of packaging
• Packaging Design
• Emerging trends in Packaging Industry
• Labeling
• Regulatory features
• Demand drivers
• Outlook
• Conclusion
• References

• Aluminum foil made it possible to effectively seal medications and other sensitive products.
• In the 1940, packaging was developed for frozen food.
• In 1952 aerosol came onto the market. Cans, available from the 1960s, heralded the expansion of the soft drinks market. Aseptic cartons, invented in 1961, have been used for preserving long-life milk ever since.

Modern Day Packaging:

Packaging is now generally regarded as an essential component of our modern life style and the way business is organized. Packaging is the enclosing of a physical object, typically a product that will be offered for sale. It is the process of preparing items of equipment for transportation and storage and which embraces preservation, identification and packaging of products. Packaging is recognized as

an integral part of modern marketing operation, which embraces all phases of activities involved in the transfer of goods and services from the manufacturer to the consumer. Packaging is an important part of the branding process as it plays a role in communicating the image and identity of a company.

• Packaging’s role is threefold:
• To sell the product
• To protect the product
• To facilitate the use of the product

The primary functions of packaging are:

• Presentation: Presentation of a product should be attractive and eye catching.
• Protection: Protection increases life cycle of a product.
• Preservation: It preserves original colours, quality, flavour, etc.
• Economy: Packaging of a product should be economically feasible.
• Convenience: Packaging should be light to handle.

The secondary functions of packaging are:

• Containment: Premeasured, pre-weight and then placed in box.
• Identification: Packaging helps to identify the products easily.
• Labelling: Its helps to promote the sale of goods.
• (^) Handling: When packaging is light in weight it facilitates easy handling of cargo.
• Suitability: It should match with the product.

One packaging may serve multiple functions at the same time. For example, one standard namkeen poly-pouch serves water and moisture resistant function

(Protective function), stocking at user level and reusable (resealable) productivity functions (Convenient function), most of the graphic and psychological functions at the same time.

Types of Packaging:

Primary packaging: It is the first layer of packaging which directly holds the smallest unit of the product.

Secondary packaging: It aims to group primary packages together for wholesale use.

Tertiary packaging: It is used for bulk handling, warehouse, storage and shipping transport.

Soft Packaging: It is a relatively new concept which refers to the bundling of services with no physical packaging being involved. For example, a tour package offered by a travel agency.

• Food packaging
• Cosmetics packaging
• Powder packaging
• Toiletry packaging
• Drug packaging
• Liquid packaging
• Clothing packaging
• Dangerous material packaging
• (^) Others

EMERGING TRENDS IN INDIAN

PACKAGING INDUSTRY:

It is estimated that total packaging demand is approx. 2% of the total gross national product in the developed economies. While food packaging contributes the maximum share to the total revenue from packaging, the next highest contributor is the personal care segment, which comprises of ‘Cosmetics’, ‘Powder’ and ‘Toiletry’ packaging.

Rigid packaging industry has seen a shift towards plastic drums and containers. The rigid packaging industry is growing at 13% per annum; of which the plastic rigid packaging is growing at 16% per annum. The Indian packaging industry is

estimated to be USD 27.6 bn in 2013 and is expected to grow to USD 43.7 billion by 2016. Indian packaging industry has been growing at 12% per annum in the last few years. India’s per capita consumption of packaging is 4.3 Kg per person per annum, as against 42.0 Kg for Germany and 20.0 Kg for China

The Indian packaging industry is dominated by the unorganized sector. As per an estimate of Indian Institute of Packaging (IIP), there are roughly 22000 units operating in the packaging industry in India and nearly 85% of them are MSMEs. The contribution of the MSMEs to the total revenue of the industry is approx. 50%.

The Indian packaging industry is predominated by the rigid packaging, which constitutes approx. 80% of the total packaging demand. Rigid packaging is the oldest and most conventional form of packaging in India.

End-user wise, food packaging contributes the maximum share in the packaging industry. Food packaging accounts for 48% of the total packaging industry.

The food packaging segment in India faces competition from China and Thailand, where the taxes and import duties are comparatively lower. India needs to depend upon imports for latest packing technology and packaging material of international standards. Higher taxes and import duties affect the cost competitiveness of the food packaging units in India.

The packaging industry has evolved from ‘packing’ in its naïve form to ‘packaging’ which supports the distribution and marketing functions for the packed product.

Primitive packaging refers to wooden barrels, baskets of reeds, woven bags etc.

Presently, with the advancement of technology, packaging can be of several types, executing several functions at the same time. Flexible packaging, resealable packaging, tamper-resistant packaging, Radio Frequency Identification (RFID) tags on packaging are a few examples of how the industry has evolved over the years.

ENVIRONMENTAL FRIENDLY PACKAGING

Increasing awareness and health consciousness amongst the consumers across various demographic profiles has raised environmental concerns, especially for the polymer based packaging material. More and more people are making a purchase decision based on the green packaging material as a matter of course. A classy example here is the shift in the sale of milk from the one packaged in a plastic

Flammable Liquid Explosives Fragile Material

Most of these symbols are accepted internationally. Even though this information may not be mandatory at times, it has become protocol to provide such information to the consumers to facilitate their purchase decision.

Some regulatory features in packaging:

Due to some regulatory measures of governing bodies and authorities, some of the factors that manufacturers consider these days for packaging are –

-- Use of packaging material made from recyclable, reusable or bio-degradable material.

-- The label on the package is provided with information regarding the ingredients used. The package labels now days are generally accompanied by detailed instructions for proper use to maximize the performance and minimize wastage.

DEMAND DRIVERS:

a. GROWTH IN RETAIL

Increased presence of global multinational companies has increased the demand in the processed food, beverages, cosmetics, consumer products, toiletries and pharmaceutical space. The manufacturing units, especially the fast moving consumer goods (FMCG) manufacturers are exploring new markets through newer retail models. This in turn, has not only widened the markets but also increased the demand of packaging of the products.

b. GROWTH OF SMALLER PACKAGING

Emerging nuclear families, increasing number of working women, rising per capita income, and growing urbanization have lead to an increase in the demand of the daily use products in smaller packages. The growth in retail sector in India,

especially driven by growth in rural segment and the lower income group has also pushed up the demand for smaller units of the products.

c. CHANGING LIFESTYLE

India has been witness to a lot of cultural change since globalization. Women are spending more time outside their home and people are having less time to cook and are trying newer cuisines. ‘On the go’ lifestyle, resulting from less time at the disposal of people and a change in the taste of the consumers has encouraged fast food and ready to cook food. People are buying more of branded products, which may be due to their being more health conscious and/ or trendy. Packaging plays an important role in creating and sustaining the brand equity. With a higher per capita income, the demand of certain products has also increased, such as personal hygiene products and convenience products.

d. DERIVED DEMAND

The growth of packaging is derived from the growth in the demand of the product contained within, even though these two may not have a perfect correlation with each other. As the demand of the product goes up, the type of packaging to be used for product may change based upon the decision of the manufacturer. However, the demand of packaging will surely increase.

A case of faulty packaging:

McDONALD’S:

The scale and size of cooperation like MC Donald's has unavoidable effects on the environment.

They used CFCS for the blown polystyrene burger containers and used non- biodegradable cutleries, trays straws and drinking containers.

In all their cases of fast food, the packaging remains long after the food has been consumed, leaving are considerable legacy of litter and wasted resources.

Throughout much of the past couple of decades, McDonald’s has been pressured into changing their packaging to become more environmentally responsible.

By Prof. Dileep Kumar M. Ex-Professor Symbiosis (SCMHRD, SCDL), IIIT, SCMLD, SBS Pune

2. Packaging- A new role packed and delivered

By ONICRA Credit Rating Agency of India

3. http://en.wikipedia.org/wiki/Packaging_and_labeling