Out-of-the box!

Does the box (or packaging) count?

Do the consumers have a bias towards a better packaged product, and if yes, under what conditions would they be willing to pay a premium for it? I spoke to a tiny sample in order to gather data points to generalize these answers.

A good packaging may improve the overall appeal of the product, thus making it preferred over its competing products or even substitutes. This is true particularly with the items that induce an impulse buy, for instance food. Chocolates come to my mind almost instantly! "I am guilty of falling for lesser known herbal tea that command a premium for their fancy packaging. Sometimes, I prefer buying an extra variety of this tea over coffee" confides Jessica, a 43 year old HR professional. Con: Consumers with a strong brand preference, or loyalists (though the implication of the word 'loyal' is very succinct today).

Another category that commands a premium for good packaging would be the 'aspirational' products. Perfumes, watches and dainty jewelry – what I describe as the luxury products for the rising middle class masses, perhaps a little oxymoronic! I have observed how most companies use exclusive packaging and premium imagery (in sync with the product positioning) to market them, creating an aura of exclusivity and desirability. An imaginative, and mostly innovative, element is added to the packaging of these products through R&D. Mohan, a 27 year old student, asserts, “Perfume bottles resembling nude women et-cetra are commonplace now, so I bought Azuro that comes in a cool kind of a vertical bottle with a surprisingly well balanced centre of gravity”. I am sure these guys spend heck of a considerable budget for their 'Package Development'. This implies that good packaging may also cause an increase in the production cost, and hence the price if the producer decides to pass it on to the consumer – another con!

And then, the last category comprises reusable, sturdy (often also microwaveable) containers – bought by price-sensitive guys, who readily pay a premium, and even hoard-up the product in order to collect similar containers. "I bought 12 kilograms of coffee, or rather 12 one-kilogram packs of coffee simply to obtain the jars they came in. I consider these as a worthwhile collection to my kitchen shelf,” says a 55 year old housewife, Jyotsna, who paid a premium (over the ‘jar-less’ coffee packs) for these jars and is still consuming the same coffee after 1.4 years of buying it.

On the hindsight, I'd assert that even before the inclusion of 'Packaging' as one of the several Ps of Marketing, the astute marketers were already harnessing this consumer bias and often even passing on the packaging cost to their consumers. A related concept was giving out freebies. It would be interesting to find out how the supply-chain cost increases with an addition of a freebie to the product volume. Just a thought!

It'd also be interesting to find out that what proportion of the budget is allocated to Package Development by a FMCG (or CPG) company. After all, packaging seems to be a science and not an art anymore!

- Namrta R