Why Weak Package Design Is Becoming a Costlier Problem

Evaluating Packaging ROI Should Include Impact on Long-Term Brand Equity

By Published on .

Brian Rafferty
Brian Rafferty
JR Little
JR Little
Have you ever returned home from the grocery store to find that you mistakenly purchased the wrong product because it looked similar to the one you actually wanted or needed? Do certain grocery categories tend to confuse or mislead you? These are some of the questions that inspired a research study by The Brand Union examining the cost of confusion in the grocery aisle. If you've mistakenly purchased a product, you're not alone. And, if you're a CMO, it is likely that your customers, or former customers, have purchased a competitor's product by accident.

In fact, about 70% of Americans have accidentally purchased a product in the last year, and many have made a mistaken purchase more than once. So, if most people have purchased a grocery product by mistake, which brands are suffering and which are benefiting? And, how much money is being lost or gained as a result of confusing, lackluster package design?

In June 2009, The Brand Union undertook a nationwide research study examining these questions, as well as views on packaging-information hierarchy and new package designs. What we found could be unnerving for many CMOs.

Annually, at least $2.1 billion of grocery sales can be attributed to accidental purchases. And, out of 51 grocery categories, five types of products cause the lion's share of confusion. If your brand or portfolio includes canned goods, beverages, bath products, over-the-counter medicines or hair products, you have reason to be concerned and increasingly so if private-label brands compete for your customers. The name brands that suffered most were not unknowns or recent category entrants: Del Monte, Campbell's, Green Giant and Hunt's were mentioned most often as being confusing or unclear. However, there are ways to ensure that products defend against copycat competitors and do not confuse customers.

Successful package design always achieves two objectives: It is clear as to where the product fits within its portfolio, and it differentiates from competitors. Rarely is a packaged product a freestanding item. Usually, the product falls within a portfolio of products with a similar look and structure. For this reason, it is extremely important to consider the impact of a single SKU design on the entire portfolio. Strong portfolios need to have a clear and consistent information hierarchy on packages so that customers can easily navigate between different products. Clear cues for differentiation, such as illustrations for scent variations or tertiary colors for flavor, need to exist. The recent debacle over the redesign of the Tropicana packaging is a case in point: Not factoring the need for stronger flavor cues across the Tropicana portfolio was one of the lead causes of a reported 20% drop in sales. The sparse nature of the Tropicana design was more often blamed in the press; however, brands like Method have demonstrated that clean design can also sell and differentiate.

Strong package design also needs to effectively differentiate from competitors, especially private-label brands. As private-label and store brands are becoming increasingly competitive, it is even more important to use design best practices to make one's product pop on the shelf and capture the attention of shoppers. According to our research, most confused shoppers have been misled by products with similar names and packaging colors. To differentiate from similar package designs or copycat brands, marketers must use proprietary design cues and structures to signal the quality and/or premium nature of the product. Packaging designers need to know how to make a product stand out within a category without losing the cues and conventions that shoppers expect. In work we did for Malibu, the iconic coconut flavored rum, we determined that white was a core equity of the brand and should also be used in packaging for flavor extensions; however, we carefully calibrated color cues on the body and top of flavor extension bottles, as consumers and bartenders often only see the top of the bottle at a bar.

Finally, we found that 35% of people believe a new package design either means they will receive less of the product or that it is a way to increase the price. Clearly stating the benefits and reasons for the package change, or ensuring a new package is seen as a necessary evolution rather than a gimmick is key to launching a new design. These findings have significant implications for on- and off-package messages accompanying a redesign.

Package design is often thought of as purely tactical and below a CMO's purview. Typically, brand managers are left to worry about packaging. But as the media landscape continues to fragment, and consumers become less easy to advertise to, not to mention more and more cynical, the package should be seen as one of the key touchpoints for a brand, to make an initial impression as well as reinforce loyalty. As such, the success of a package design should be measured not only on shelf impact and the ease with which consumers navigate the portfolio, but also on the key brand attributes communicated. Often, when packages are evolved, key brand cues are forgotten or left on the cutting-room floor, and this leads consumers to no longer believe in the brand itself. Evaluating packaging ROI should include the impact on long-term brand equity, not just sales and shelf appeal.

Five tips for a strategic approach to package design

  1. Consider the portfolio, not just an individual SKU.
  2. Understand how shoppers make choices in your category and what information matters most.
  3. Know the core visual equities of your brand.
  4. Develop a package that your brand can own.
  5. Highlight a significant packaging evolution's benefits to your customers.

ABOUT THE AUTHORS
Brian Rafferty is exec director-research and strategy for The Brand Union in the United States. He works with clients such as Bank of America, Coca-Cola, Pernod Ricard, Alcatel-Lucent, Johnson & Johnson, HP and BlackRock. Prior to joining The Brand Union, he was co-principal and managing director of Plaid, a boutique research and consulting firm.
JR Little is a senior strategist for The Brand Union. He's helped build strong brands for a wide range of clients including Genentech, Alcatel-Lucent, Johnson & Johnson, HP, Mars, Pernod Ricard, American Express and TheMarkets.com. Prior to joining The Brand Union, he worked in the healthcare communications industry with Sudler & Hennesey (WPP) and Harrison and Star (Omnicom).
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