Power PACKED

Thursday, April 23, 2009

A great product may just get turned into a hopeless also ran in the market place if it is not packaged right. Surely that’s reason enough to consider this aspect of your marketing program very seriously

This year, PepsiCo has found a mantra to breathe new life into its beverage category. The buzz word is “Refresh Everything.” With this focus, the company plans to reinvent the brand and fill it with the spirit and optimism of youth. Massimo d’ Amore, CEO, PepsiCo North America Beverages, said, “Today, people want beverages to refresh more than their taste buds... this is what our brand reinvention strategy is all about and we’re introducing new identities, new packing and holistic marketing campaigns designed to inspire people of all generations,” as according to them, their beverages have always been at the centre of popular culture, where they have energized new generations for years. The 60-second “Pepsi Pass” video on You Tube takes the winning mantra forward by claiming “Every generation refreshes the world… now it’s your turn.”

With a series of new advertisements & new packaging, the company marched ahead on this exciting plan, in the beginning of this year. It refreshed (read: modified) a lot of things; like refreshed the Pepsi logo, the Mountain Dew font and the packaging of its premium category orange juice Tropicana, among other things. The company invested $35 million to roll out this new look of Tropicana. Now, instead of its trademark “orange-with-the-straw” image, the Tropicana carton featured a glass full of an orange juice, while the cap was designed to look like an orange. The result – after the launch of the packaging on January 1, 2009, the sales of Tropicana had plummeted by 20% by the end of February.

It couldn’t get more shocking. A brand that was nurtured and grown for 30 years lost one-fifth of its customers in fewer than 60 days. To make matters worse, not just did Tropicana’s market share drop, but that of its competitors increased; i.e. Coca Cola, Minute Maid and various other brands, including private-label products, posted a double digit unit sales increase during this period! So what went wrong? In its bid to reinvigorate the brand and make new emotional connections, the company lost sight of the most important factor – customer experience. That is, the shopping experience of the customer. The new package design, though classy, actually confused the customer. The new design lacked the distinctive personality of the “Orange-with-the straw” image. Maybe it was not classy, maybe a lot of people didn’t care much about it, yet the “Orange-with-the-straw” made the carton stand out on the shelves of supermarkets and made it easier for the customer to grab the juice of their choice. The new design could not stand out and made the brand look generic. No one in their wildest dreams could predict that a change in packaging could cause such a steep and unthinkable fall in sales. The company, of course, has immediately discontinued the new packaging & brought back the original, but this big goof-up definitely gets one thinking.

The silent salesman
Very often, “packaging” is referred to as the silent salesman – speaking volumes, without saying a word! Packaging conveys a very strong marketing message. It’s packaging that a lot of seasoned marketers are turning to, during these times to boost sales. Frito-Lay’s new Smart Food popcorn is now coming in a smaller pack – as research revealed, women (who are its target customers) preferred smaller, portioned packaging for their snacks. Pepsi is bringing back its retro-style packing for Pepsi Cola and Mountain Dew – reminiscent of the 60’s & 70’s. Starbucks is planning to roll its ice-cream into grocery stores this summer and its packaging for the new super premium flavors emulates the company’s iconic white cup – so that loyal customers can recognize it in a glance. Mango Frooti is going in for innovative packaging to help increase sales this summer. It’s now offering a Frooti devil pack and a Frooti cupid pack – to make it look more contemporary and appealing to the youth and to enhance its image. Sprite also comes in a smaller version called Sprite Xpress now – in sync with the on-the-move lifestyle of the youth. Women’s Horlicks was the best ever launch for GlaxoSmithKline last year – primarily due to the unique design of the bottle, which was shaped like a woman’s form – and woman loved it! Old brands need to change with the times to remain relevant to the new generation & a new packaging helps in doing just that. Old brand Sunsilk became youthful & trendy last year with its new packaging.

Earlier considered as a protective cover, packaging today has become the key differentiator of brands. A new packaging always manages to draw back the attention of the customers towards itself. If it’s good, they always pause & give the brand a second look. Now you know why, after a break–up, your girlfriend suddenly changed her hair colour & cut – for that second look! Always repackage – to appear more attractive to the user! It’s no surprise then that while seven years ago, organizations were spending approximately 5-8% of R&D budget on packaging – today the number has risen to 15-20%. Even our political parties are getting all dolled up for the coming elections – each one dressing up their candidates & plastering their images all over the city. Each one is trying their best to package their party with smiling images of their politicians.

Packaging fights
We may not realize it, but a lot of marketing wars are fought by packaging. It fights competitors. Sony has been the undisputed leader in the electronics market, but LG & Samsung managed to turn the tide in their favour through innovative design. Nokia felt the heat when Motorola dressed up its mobile phone in a trendy Moto Razr avataar. Horlicks got more visibility and higher shelf appeal with its new & trendy packaging & kept competitors at bay. Cobra Beer now knows that to win market share, it too needs to pack its beer in cans – for that’s how consumers prefer it & United Breweries (its competitor) is already doing it – and consumers are also picking it up faster than Cobra.

It fights controversy. Known for destroying the environment wherever it goes, Coca Cola decided to wear its commitment to the environment on its sleeves – literally. Most of its packaging is 100% recyclable and it now also has a “Recycle Now” featured prominently on all its products – to emphasis that its packaging is recyclable.

McDonald’s wants to remove its “bad food” tag and show its consumers its healthy side and who else to help it – but packaging. Through an initiative it has launched in 2008, the brand will ensure that its packaging features the brand’s food quality story – another way of reinforcing its quality. Pret–a– manger of UK has been doing this for years now. The packaging of its sandwiches, juices, cakes, salads, all feature short sensitive stories, bringing out Pret’s commitment towards quality and freshly made food as compared to others. A lot of people started preferring Pret to McDonald’s after this. Now Mc- Donald’s is probably trying to woo them back and make them say, “I’m loving it” – even more loudly. After worms were found in chocolate bars of Cadbury Dairy Milk, the company decided to start a campaign called “Project Vishwas” and the first thing it did was to change its packaging. The old packaging would remind consumers of the worms, so it needed a new look.

It fights branding wars. Almost all comparative advertisements use the packaging of competitors to prove their point. Be it the Surf-Ariel wars, or the Pepsi-Coke ones. This time too, Coke’s brand Powerade is using its competitor Gatorades’ packaging to fight the war. To prove that Gatorade provides half the benefits of Powerade, hoardings across US feature half the bottle of Gatorade labeled as the “incomplete sports drink.” The iconic packaging of Gatorade is instantly recognizable. With 75% market share, a very loyal following & a packaging loved by all, Gatorade might just win this battle too.

Packaging should reflect the culture and the times. Today, it’s more grab-&- go. No wonder that restaurants are becoming more automobile friendly and automobiles, more drive-in-eat-in-car friendly. McDonald’s & Burger King now package their take-away food in cups that can fit car cup holders. Dashboard dining, i.e. sales at the drivethrough window now account for at least half of all the fast food restaurant’s sales. The power of packaging cannot be denied.

The Package is the product
You may work hard on the quality, the price, the distribution of your brand, but don’t ignore packaging. It’s a powerful tool. There is no better proof than “bottled water.” It is the ultimate when it comes to a commodity product and with more than 400 brands fighting for shelf space, the only attribute that separates them is packaging.

Packaging influences everyone – when children were given milk & carrots in packets with a McDonald’s logo on it, they found it more tasty!

A product is no good today till it’s packaged well. So if you really want the consumer to grab your brands – make sure it’s power-packed.