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The Psychology of Effective Packaging; Why Packaging is More Important Than You Think.
This article was originally published on 25 June, 2022 by Aditya Dedhia, at the age of 18.
The effects of packaging go beyond the surface. They say the first impression is the last impression, and it just so happens to be that there is merit to this claim when it comes to purchasing decisions.
What is the point?
The point of packaging is, well, to contain and protect a tangible good. Nevertheless, this shell also acts as one of the most powerful tools in the hands of marketers. The last straw of comparison between equally comparable products is their packaging. In Professor Dan Ariely's book 'Predictably Irrational', he points out the irony in how a high-quality product does not translate to an equally high perceived quality and certainly not an equal growth in sales (Ariely, Dan). The importance of packaging and marketing in general stems from this very idea.
The Power of Perception
Packaging can serve to inflate quality perceptions. Marketers are well aware of our natural tendencies and use packaging tricks to exploit them. We are hardwired to respond to certain colours, shapes, and images in emotional ways that can lead to more favourable perceptions of the product. This is not to say that quality does not matter, but rather that it only gets you so far. What makes it so difficult for us to grasp value is that we cannot contextualise value from nothing. More often than not, this means that for our purchasing decisions, the packaging very well serves as the anchor to the product's perceived value.
Would you return to a restaurant that cheaped out on its coke with plastic bottles?
It is not so much the absolute quality of the product itself that determines its perceived quality as much as it is the relative quality of the ambience in which it is served.
This has two connotations. One is that if a product has inferior packaging, the manufacturer is relying on the retailer to create a convincing ambience for sale; the second is that a product with superior packaging creates an ambience that speaks for itself. With rising competition with a saturated market of products and brands, It is also likely that retailers will choose manufacturers with products that fall into the latter by starkly distinguishing themselves.
The Perils of Being Too Generic
Generic products are those products that do fail to (or at least ineffectively) communicate their brand individuality. For the picky lot, these products will be further discounted to mere commodities. Unfortunately, for the producers, even if they invest their efforts into high quality, they will, under no circumstances, have price leadership and will be seen as an unstable brand that has a lacklustre idea of their brand vision. This inevitably leads to limited opportunities for economies of scale, and then management may wonder why their investments are not generating equivalent returns.
There is a reason why the 'product' is only 1 of the 7 Ps of marketing (alongside price, promotion, place, people, process, and physical evidence). The idea is to think from a perspective of maximising customer retention rather than maximising pure stock turnover rates. Businesses do not become industry leaders by selling goods that just work; in that case, it will not long before another will take over. A business that differentiates itself by forming an identity is a business that will eventually establish customer loyalty and gain market leadership.
Case Study: Toblerone
Toblerone is a Swiss chocolate manufacturer owned by the MNC Mondelēz International. Toblerone's packaging is iconic not just because it is different, but because of the story that is sold along with it. It is a prime example of intelligent packaging design because its triangular prism allows for a rigid and dense structure for easy storage, easing stock control overheads, but also fortifying the link between a brand and its roots. Toblerone emphasises its Swiss authenticity by associating its triangular packaging as a motif for Switzerland's famous mountain peak 'Matterhorn'. Now, is that the reason why people eat Toblerone? Probably not. However, is it enough to establish brand identity and authenticity? Quite so, simply the idea of associating its background is sufficient reason for Toblerone's packaging to be memorable and warrant repeat purchases.
Case Study: Apple
Apple is a prominent example of a brand that has mastered the art of packaging, from its factory-sealed plastic wrap to the perfect air cushion upon lifting the familiar scented box that allows for a dramatic and memorable unboxing experience. I am sure we were all excited, as silly as it sounds, it is a memory that sticks. Even if we are likely to dispose of the packaging or stash it away, Apple is betting on our subconscious to awaken the next time you see the Apple logo and remember the magical unboxing experience you had when you first bought their product.
However, Apple's high-quality products are such that, even if their packaging was not up to par, there would still be high demand. After all, the Android's and Windows' of the world are doing pretty well for themselves by prioritising their product quality over the seemingly little details. From a rational standpoint, it makes sense that the unboxing experience should not have anything to do with making an important purchasing decision where practical utility is involved. The caveat is that consumers are far from rational, and the seemingly little details win hearts. The little things end up making all the difference. The perceived value of the product is anchored by its initial presentation and primes the brain for what kind of an experience to expect from consuming the product. If you think about the millions that Apple invests annually into research and development for its packaging, the idea ought to have merit.
In Marketing Myopia, MIT professor Theodore Levitt brings out an interesting parallel, that the major cause businesses do not prioritise marketing because they get caught up in the myopic view of focusing on the internal factors that are easy to control- such as R&D and TQM, and exclude the factors that are more subjective such as brand awareness and consumer perception (Levitt, Theodore).
When Apple made the shift to reducing its iPhone boxes in half by eliminating chargers, it was ridiculed at first, especially by significant competitors such as Samsung. Oddly enough, the competitors swiftly followed suit in Apple's footsteps. Although the line is blurred regarding the intentions of this move as a sustainability-oriented one or a cost-cutting one, it was a clear marketing success. The year that the chargers were ditched in 2020, 2020Q4, and 2021Q1, sales were at an all-time high, breaking all previous records (Silverman, Dwight) [1]. This change allowed Apple to lower production costs, reduce the required inventory space, as well as paint it all as a well-thought-of sustainability-oriented CSR stunt.
Conclusion
Customers in their personal lives tend to buy with their hearts, not their wallets, as we so firmly want to believe. The so-called rational consumer would happily walk five blocks to get a $20 book from his favourite author at half price, and at the same time, would happily pay a premium and make a day trip to another city for $100 if it were signed by the author as part of the book's launch event.
When done right, packaging can convey a message that speaks to the quality of what is inside. It can also help a product to stand out amongst a sea of competitors. Conversely, poorly designed or executed packaging does not only undermine the organisation's efforts but may as well deal long-lasting damage to the brand's consumer perception. So, the business in question must ask itself, what is it really selling?
The bottom line: When money matters, people want to be sold something greater than the product itself. Maybe a message, maybe a story. Maybe an experience, maybe a lifestyle.
Footnotes
[1] Further statistics regarding Apple's sales history can be found here.
Works Cited
Ariely, Dan. Predictably Irrational: The Hidden Forces That Shape Our Decisions. HarperCollins UK, 2009.
Levitt, Theodore. Marketing Myopia. Harvard Business Press, 2008.
Silverman, Dwight. "Apple Back On Top: IPhone Is The Bestselling Smartphone Globally In Q4 2020." Forbes, 22 Feb. 2021, www.forbes.com/sites/dwightsilverman/2021/02/22/apple-back-on-top-iphone-is-the-bestselling-smartphone-globally-in-q4-2020/.
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