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The importance of packagingdesign for own-label food brands

L.E. Wells, H. Farley and G.A. ArmstrongSchool of Marketing, Entrepreneurship and Strategy,

University of Ulster, Newtownabbey, Northern Ireland

Abstract

Purpose This paper seeks to investigate the importance of packaging design for a UK premiumown-label food brand, by developing an understanding of how consumers evaluate own-labelpackaging, providing an insight into their shopping behaviour regarding premium own-label dessertsand identifying the factors that influence their purchase decisions. Implicit in this is a need to establishhow the packaging designs of premium own-label products influence the purchase decisions ofconsumers.

Design/methodology/approach The paper reports on the findings of participant observationalexercises employed at two Tesco stores.

Findings Overall, analysis of findings would clearly indicate that there is a strong associationregarding the influence of packaging on the purchase decision, with over 73 per cent of interviewedconsumers stating that they rely on packaging to aid their decision-making process at the point ofpurchase.

Research limitations/implications This study reports on the preliminary findings of the firststage of a research project. Future studies could extend this research by considering the importance ofpackaging for products with lower experiential benefits than those offered by premium desserts or,additionally, by employing a comparative study of own-label brands.

Practical implications As own-label brands are exclusive to, and owned by, the retailer they havepotentially the opportunity to develop packaging designs that are even more attuned to their customerbase than those offered by the equivalent range of branded products.

Originality/value This paper presents empirical research investigating the importance ofpackaging design for own-label food brands.

KeywordsPackaging, Design, Food packaging, Retailers, Premium brands

Paper typeResearch paper

IntroductionFood product development and innovation continues to be seen as a fundamentalstrategy for competitive success and survival within a competitive global market(Stewart-Knox and Mitchell, 2003; Bogue, 2001; Harmsen, 1994). Despite thisacknowledgement, a large number of new food products (72-88 per cent) continue to fail(Bogue, 2001; Lord, 1999; Buisson, 1995; Fuller, 1994; Rudolph, 1995), highlighting the

difficult task that retailers face in todays food industry (Moskowitz, 1999). Foodretailers are facing a somewhat challenging scenario where the cost of marketing isalso rising and it is becoming more difficult to maintain sales for brands that are notthe first choice household name (Peters, 1994). In addition, consumers are becomingmore demanding in terms of quality and choice (Mintel, 2003) and are constantlyseeking a product tailored to their every want and need.

Products are developed to, and indeed are expected by consumers to taste good;therefore, it is not surprising that consumers will increasingly make their initial choices

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based on aesthetic value (Schmitt and Simonson, 1997; Dumaine, 1991). Thus, thequestion commonly faced by many food retailers is how to distinguish or differentiatetheir product from competing products. During the 1980s, UK food retailers began toenhance the pack design of their products, discovering that improvements in

packaging design and product quality enabled them to compete directly with foodmanufacturers (Southgate, 1994). Yet, despite the fact that the importance of packagingas a communication tool is growing (Silayoi and Speece, 2004; Nancarrow et al., 1998;Bloch, 1995), there is still limited research into the influence of packaging on brandidentity (Underwoodet al., 2001). In the competitive world of food retailing, packaginghas to work harder than ever if the product is to be noticed through the congestion ofcompetitive products (Milton, 1991) and surprisingly few food retailers appreciate thepower of packaging as a piece of direct communication (Peters, 1994).

Own-label growthOwn-label products are defined as any products over which a retailer [has] exercised

total sourcing and market control (Mintel, 2005a, b). For retailers, own-label brandsoffer an opportunity to build store loyalty (Dick et al., 1996) and Mintel (2005a, b)estimate that the market growth for UK own-label food increased by 18 per centbetween 1999 and 2004 placing a total value of 28.5billion on the UK market. A recentreport published by market analyst Datamonitor (2005), revealed that spending onown-label food products had increased from 34 per cent to 45 per cent during theperiod of 2000-2005. Despite the increasing power of own-label products, many in thefood industry believe there is still plenty of room for growth (Food and Drink, 2003).Perrin (2002) (cited by Food and Drink, 2003) states that growth will continue asretailers become more and more sophisticated marketers and the retailers willcontinue to increase the power of their own-label brands by offering even morepremium priced, higher quality products. Consumer craving for quality and choice in

turn has allowed retailers to focus on the premium priced, chef quality products[which] offer lucrative market opportunities (Roberts, 2001). Recent research reportsthat premium brands can now account for about 20 per cent of a category and sell atabout 40 per cent more than standard lines (Taylor Nelson, 2002). Virtually all of theown-label growth success has occurred within the chilled foods sector, leading the wayin many chilled categories (Mintel, 2005a, b). One such category is chilled desserts, saidto be worth 302 million in 2004, having experienced a growth of 29 per cent since 1999(Mintel, 2005a, b). Research conducted by Mintel (2005a, b) indicates that more than 98per cent of chilled dessert sales are accounted for by retailers such as Marks & Spencer,Tesco and Sainsburys, with Tesco leading the way in sales. To date, there has beenlittle or no research conducted into this successful premium own-label sector.

Rationale of studyClearly, the UK food and drink supply chain is concentrated in the hands of a fewmultiples (Mintel, 2005a, b). The top three according to Mintel (2005a, b) are Tesco,Asda and Sainsburys, with own-label sales accounting for 51 per cent of sales for thethree retailers (Mintel, 2005a, b). As it was impossible to investigate each of the topthree retailers of own label in depth due to time constraints, it was decided to focus onone. Recent research conducted by Mintel (2005a, b) into own-label products,highlighted the phenomenal success of Tescos own-label sub brands. Four out of

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Tescos five sub-brands enjoy penetration levels of over 20 per cent and the top twoare bought by a third of all main shoppers (Mintel, 2005a, b). For this reason, Tescowas selected for the purposes of the research study. The retailer was the first UKown-label brand to offer consumers a premium range of prepared food and drink

products under their own-label Finest brand.

The role of packagingThe basic function of packaging is to preserve product integrity by protecting theactual food product against potential damage from climatic, bacteriological andtransit hazards (Stewart, 1995). However, the first to define packs as the silentsalesman was Pilditch in 1957, who argued that the pack must come alive at the pointof purchase, in order to represent the salesman (Vazquez et al., 2003). About 30 yearslater, Lewis (1991) expanded further on Pilditchs views, stating that good packagingis far more than a salesman, it is a flag of recognition and a symbol of values. Giventhat only a small minority of brands are strong enough to justify the investment that

national advertising requires, for the rest, packaging represents one of the mostimportant vehicles for communicating the brand message directly to the targetconsumer (Nancarrowet al., 1998). As the retail environment becomes saturated withcompetitors vying for consumers attention, packaging has to work harder than ever ifthe product is to be noticed through the congestion of competitive products (Milton,1991). Alongside this challenge, retailers are faced with the realisation that consumersnot only differ in how they perceive brands but also in how they relate to these brands(Fournier, 1998; Muniz and OGuinn, 2001).

MethodologyOwing to the gap in existing research regarding consumer-buying behaviour withinthe premium dessert category, it was decided that the most appropriate method to

employ would be a participant observational study, with the aim of reducing the manyuncertainties about the behaviour of customers in-store (Knee, 2002). Observation is aresearch technique that is often implicit in the data-gathering approach andobservation is something we cannot fail to do as people, we are all expert observers(Hackley, 2003). Furthermore, participant observation was chosen as it puts theresearcher where the action is enabling them to experience the lives of informants(Bernard, 2000). Previous research has questioned the extent to which the traditionallaboratory setting can mirror the consumers shopping experience (Marshall, 2003).Rather than question consumers on their behaviour in a laboratory environment, oneoption is to observe consumers behaviour and their conversations in an actual store(Meiselman et al., 2000; Arnould and Wallendorf, 1994). An observational approachprovides a clearer representation of the decision process that consumers proceed

through rather than the consumers perceptions of that process (Douglas and Wind,1978), thus providing the researcher with the ability to uncover unconscious consumeractions (Wimmer and Stiles, 2001). In addition, the participant observational studyprovided the opportunity not only to observe the shopping and buying behaviour ofconsumers, but also to intervene and question consumers. Consumers were firstlyobserved without interruption, allowing their natural behaviour to be recorded. Onlyonce they completed their actual purchase decision, did the researcher then approachthem. Such a method has a clear ethical advantage as consumers can choose to decline

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Overall, analysis and discussionOverall, a total of 485 groups were observed in the two stores over an entire tradingweek from Monday to Saturday. Out of the 485 groups that stopped to browse atthe cabinet, 187 (38 per cent) of them purchased a dessert. Unfortunately, due to the

merchandising of chilled desserts in Store B, it was impossible to calculate an overallfigure for the purchase frequency of desserts versus the purchase frequency ofpremium desserts. The overall group composition displayed was variable with no clearsegment identified as the prominent purchaser of premium chilled desserts. Adultfemales formed the single largest category with 29 per cent of the total stopping tobrowse at the cabinet. This was closely followed by the group consisting of adultfemales and children at 20 per cent. There was very little difference between the adultmale segment at 16 per cent and the adult female and male segment at 17 per cent.The remainder was comprised of adult females, males and children at 12 per cent,followed by adult males and children at 6 per cent, the smallest group percentage tostop at the cabinet. Even though the role of women has changed dramatically over thelast 30 years, female consumers when co-habiting continue to take on the mainshopping role. Research conducted by Beardsworthet al.(2002) into the significance ofgender for food choices, overwhelmingly indicated that it was women who bore themain responsibility for deciding what food products are purchased. When examiningthe breakdown of customer age groups in comparison to the group composition andpurchase levels, there was no clear association. Previous research implies that brandloyalty increases as people age (Cole and Balasubramanian, 1993). Supporting thisresearch is a suggestion by Sethuraman and Cole (1999) that brand loyalty increases aspeople age, where younger consumers may be prepared to pay smaller premiums fornational brands as their preferences are not as strongly formed as older consumers.As a result, younger consumers may place a higher focus on the image of a brand andbe less familiar with store brands (Sethuraman and Cole, 1999). However, findings in

this observation exercise differed from these previous findings by Cole andBalasubramanian (1993) and Sethuraman and Cole (1999). Here, the strongest level ofbrand loyalty was evident in the age category of 34-39 years, followed by thoseconsumers in the 16-24 years category.

One of the predominant trends observed in both stores was that the purchase ofdesserts was quite frequent; with 44 per cent of consumers questioned purchasingdesserts at least once a week, followed by 23 per cent purchasing a dessert oncea fortnight. This was followed by 18 per cent purchasing a dessert more than once aweek and 15 per cent of consumers purchasing only occasionally. The main consensusamong consumers was that they were allowed to spoil themselves and theydeserved to treat themselves once in a while. Store B had a considerably lowerpurchase penetration than Store A. However, customers visiting Store B may

potentially have been unaware that there was a premium offering of desserts due to themerchandising layout within the store at this time.

Female consumers illustrated the highest incidence of planned purchasing in thisexercise. Previous research has demonstrated that women are more likely to plan theirpurchases than men (Cobb and Hoyer, 1986). Block and Morwitz (1999) attribute threereasons for this, firstly that women are traditionally in charge of grocery shopping;secondly, that because of such tradition, females are more knowledgeable regardingproducts and stores, and lastly, that females have a better idea about inventory levels

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than males do (Goldman and Jonhansson, 1978; Urbany et al., 1996). There was someevidence of pester power where young children were notably attracted to the dessertsand as a result of this, the majority of parents involved did then purchase the product.

The decision-making processWhen examining the decision-making process of those questioned in both stores, therewas no dominant style of purchasing behaviour evident. Over 54 per cent portrayedstrong behavioural traits of planned purchasers as compared to 46 per cent, displayinga more impulsive buying style. Wood (2005) defines inpulse buying as extraordinary,emotion-saturated buying without regard to financial or other consequences. Thoseconsumers buying for indulgent reasons were mainly the result of an impulsivedecision. In these circumstances, consumers were highly driven by their emotions,whether positive or negative. Some consumers felt they should reward themselvesafter a good day whereas others were looking for comfort food after a bad day. Manyshoppers portraying this behaviour felt that a Finest dessert was one similar to

what you would receive in a restaurant and explained that when they were treatingthemselves they always wanted the best Such findings would correspond with theTheory of Planned Behaviour (TPB) (Ajzen, 1991) whereby consumer behaviour isdetermined by three dimensions, the consumers attitudes towards a behaviour, thesubjective norm and the perceived behavioural control (Ajzen, 1991). By purchasing adessert, it was clear that consumers expected their emotional needs to be fulfilled andsubsequently lead to an experience outcome that they would value positively (Conner,1995). Moreover, this type of impulse shopper was inclined to be more adventurousthan the planned shopper and was readily prepared to try new products.

One apparent theme, which arose during questioning, was the number of consumerswho were making a planned purchase for a specific occasion; these occasions rangedfrom a dinner party or family lunch to a birthday party. For such occasions, consumers

were seeking a product that they wouldnt be embarrassed to serve to their guestsand play it safe with a product that they knew would deliver. Those consumerspurchasing for a certain occasion claimed they bought premium own-label as theycould be reassured the product they were serving was a high quality. Many shopperswere looking for a product they could pass off as their own as due to time constraintsthey were unable to prepare a homemade dessert. Again, similarities arose from thesefindings and Ajzens (1991) TPB, whereby these consumers experienced some socialpressure to choose a dessert that they thought their guests would approve of and thuslead to a positive outcome. Furthermore, this type of consumer displayed a high level ofbrand loyalty towards premium own-label desserts. The reasons presented byshoppers were that Finest is a brand you can trust and the products are always highquality. Interestingly, a planned purchase very often coincided with a repeat

purchase, especially those buying for a special occasion.There appeared to be a low level of brand loyalty in Store A compared to Store B,

however, some of these shoppers did purchase Finest brand products on a regularbasis. Consumers were searching for a product to fulfil their requirements at thatparticular moment and were keen to purchase any product that they thought would doso. Alternatively, in Store B, brand loyalty was visibly high, illustrated not only bypurchase frequency but also by the fact that 52 per cent of consumers were making arepeat purchase. Although 34 per cent of shoppers were buying a new product, they

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maintained that they had remained loyal to the Finest range declaring that theyliked to try all the desserts and enjoyed a bit of variety to satisfy their changingmoods.

Retail literature approaches point of purchase buying as commonplace, expected

and indeed encouraged (Hackett et al., 1993; Phillips and Bradshaw, 1993). Findingsfrom the research would indeed suggest that point of purchase buying was readilypractised by shoppers throughout the exercise. Clearly, store environment and highlyvisible products have the ability to act as prompt lists providing customers with theoption of delaying decision-making until they are in store (Bowlbey, 1997). Thoseshoppers, who were restricted with their shopping time, relied heavily on extrinsicattributes, especially visual information. Previous research conducted by Pieters andWarlop (1999) also implied that time pressured subjects tended to filter textualinformation such as ingredient information on packages, more preferring the lesscognitively-taxing pictorial information. It was evident that, shopping motivation hada large impact on purchase choice and on the various extrinsic attributes thatconsumers used as indicators of quality. Recent research revealed that consumers notonly differ in how they perceive brands but also in how they relate to brands (Munizand OGuinn, 2001; Fournier, 1998), a theme also evident in this research.

Own-label packaging influenceFrom the observation and consumers comments, it was obvious that consumers placeda high dependence on the extrinsic attributes of packaging to aid the purchase decision.Indeed, over 73 per cent of consumers agreed to utilising packaging to assist in theirpurchase decision. One shopper explained that she spent a great deal longer choosinga dessert as compared to other food products and that packaging had a big influenceon [her] decision. Cox (1967) and Olson and Jacoby (1972) suggest that whenconsumers make quality judgements they use direct and indirect indicators of quality.

At the point of purchase in particular, consumers increasingly relied on indirect orsurrogate cues to aid their decision. Previous research in the grocery industrydiscovered that extrinsic cues are easier to recognise and process than intrinsic cues(Purwar, 1982).

On closer examination, there does not appear to be one prominent attribute thataided consumers in their purchase decision in this research. Therefore, it is importantthat retailers understand the surrogate variables used by consumers to assess brandquality and whether various consumer segments differ in their use of such indicators inthe decision-making process. Over 43 per cent of consumers claimed to use the packphotography as an indication of product quality and one customer commented thatthey used the photography to assist as a serving suggestion. Even though a numberof premium own-label products have a clear window on the packaging displaying the

actual product, a number of consumers still relied on the photograph to ensurethe product looked how it should do. Consumers, who made their purchase onimpulse tended to rely heavily on the extrinsic attributes of the packaging, especiallypack photography, to assist in their choice. Of those shoppers questioned, 30 per centfelt that familiarity of the product was important, perhaps explaining the large numberof repeat purchases made. Following this, 21 per cent of consumers used the productdescriptor as a tool for judging quality; this was especially evident in those indulgentseeking consumers. This type of consumer appeared to be easily persuaded by the use

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of sensory descriptor words to appeal to their senses. In the words of one shopper,they were looking for a product that made their stomach rumble and mouth waterwhen they read the descriptor. Only 6 per cent of shoppers maintained that portion sizewas a determining factor, this came across as a major factor for many of the groups

with families, for the obvious reason to ensure there is enough to go around.Vranesevic and Stancec (2003) stress that when there is no obvious advantage over onebrand as compared to another with regards to the physical product, consumers willevaluate the product brand and use it as a sign of quality. Likewise, De Wulfet al.(2001) believe that when consumers use extrinsic cues to judge product quality, storesare at a disadvantage when compared to national brands. Reinforcing this statementis Richardson and Dick (1994) who explains that store brands are largelyundifferentiated in consumers minds. Interestingly, the findings from this researchwould contradict these statements as analysis would indicate that current extrinsicattributes of premium own-label brands do have the power to act as a quality tool whencommunicating with the consumer. However, these findings may be due to the fact thatthe product category under investigation is generally own-label led. Analysis wouldindicate that current extrinsic attributes of the premium own-label brand do have thepower to act as a quality tool when communicating with the consumer.

ConclusionFrom this observational work, it is obvious that there was no one clear customersegment that predominately purchased chilled desserts, rather the majority of thecustomer base buy into the range. One clear emerging theme from this exercise wasthe identification of five consumer segments who all purchased premium desserts.Each segment displayed varying levels of purchase frequency and brand loyalty andrelied on different extrinsic attributes to aid their decision. This provides anopportunity for retailers like Tesco, to increase sales and build a brand relationship

across their customer base. However, facing the difficulty of designing a package thatcommunicates to the needs and wants of such a wide customer base, is not without itsproblems. Perhaps, surprisingly, some of the consumers even viewed their shoppingtrip as a recreational activity. Some academics do state that shopping has becomea major leisure and lifestyle activity (Bayley and Nancarrow, 1998). Generally,shoppers spent a considerably longer time browsing the chilled desserts cabinet ascompared to the time they spent in other product ranges in the store. To many, Finestdesserts parallel restaurant standard and are of the highest quality. Consumercomments revealed that they were seeking a dessert that satisfies all their cravingsand required packaging that makes their stomach grumble and mouth water topersuade them to make a purchase. Retailers can utilise this information for developingthe most effective packaging communications, point of sale and merchandising.

By identifying the segments that purchase premium own-label and the factors thatinfluence their choice, retailers can then develop a packaging design that enhancesbrand awareness and creates positive associations within the consumersconsciousness.

Overall, analysis demonstrated the growing importance that is placed on packagingas a tool for differentiation from competitor products and for further developing theretailers own-label brand. Analysis of findings would clearly indicate that there isa strong association regarding the influence of packaging on the purchase decision,

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with over 73 per cent of interviewed consumers stating that they rely on packaging toaid their decision-making process at the point of purchase. Since, so many purchasedecisions are made at the point of sale, the impact of packaging represents animportant issue for food suppliers to consider. As own-label brands are exclusive to,

and owned by, the retailer they have the opportunity to develop packaging designsthat are even more attuned to their customer base than those offered by the equivalentrange of branded products. Consequently, it is imperative that retailers strive tounderstand the surrogate variables used by consumers to assess brand quality andwhether various consumer segments differ in the use of such indicators during thedecision-making process.

Limitations of researchA possible limitation of this research is that it focuses upon a product category that isconsidered to be high in experiential benefits, derived from the pleasure of consumingluxury desserts. Prior research has revealed that the more experiential the productsbenefits are, the more a consumer will focus on processing imagery and sensoryinformation, which in turn may increase the relative importance of packaging design atthe point of purchase. Owing to the time constraints and nature of this study, it wasimpossible to additionally investigate the importance of packaging design for productswhich are considered to be lower in terms of experiential benefits; however, furtherresearch could be undertaken to investigate this aspect. Moreover, the study wasconducted in the UK, where own-label brands have experienced phenomenal growthsince the 1980s and play an important role in food retail; therefore, findings may vary ifthe study was to be conducted in America or other parts of Europe.

Future researchAs this is empirical research, further research may enhance the validity and

generalisation of these findings. This study reports on the preliminary findings of thefirst stage of a research project. Analysis of the reported research indicates that furtherinvestigation is essential for developing effective packaging for own-label brands.These observational findings aimed to structure and inform the next stage of research,which consisted of several focus groups. Results obtained from the observational studywill be used to inform and develop a matrix to better segment participants into one ofthe seven focus groups, reflecting their shopping behaviour. Future studies couldextend this research by considering the importance of packaging for products withlower experiential benefits than those offered by desserts or additionally, employinga comparative study of own-label brands.

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