Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

9. Elements of Product
   Planning for Goods and
   Services

Text © The McGraw−Hill

Companies, 2002

268 Chapter 9

Dean get distribution in convenience stores and vending machines. Of course, stor-

ing milk for long or shipping it large distances is still a problem because milk is

perishable. But Dean is working on packaging technology that will keep milk fresh

for 60 days. For now, Dean is introducing a blue-ice freezer pack that keeps a six-

pack of milk cold so people can take it to work or school. The package is also the

focus of an ad campaign that positions the new product as hip. The ad shows a

chug of milk in a back jeans pocket with the tagline, “Milk where you want it.”^20

Packaging can tie the product to the rest of the marketing strategy. Packaging

for Energizer batteries features the pink bunny seen in attention-getting TV ads and

reminds consumers that the batteries are durable. A good package sometimes gives

a firm more promotion effect than it could get with advertising. Customers see the

package in stores, when they’re actually buying.

Better protective packaging is very important to manufacturers and wholesalers.

They sometimes have to pay the cost of goods damaged in shipment. Retailers need

protective packaging too. It can reduce storing costs by cutting breakage, spoilage,

and theft. Good packages save space and are easier to handle and display.^21

To speed handling of fast-selling products, government and

industry representatives have developed a universal product code

(UPC)that identifies each product with marks readable by elec-

tronic scanners. A computer then matches each code to the

product and its price. Supermarkets and other high-volume

retailers have been eager to use these codes. They speed the

checkout process and reduce the need to mark the price on every

item. They also reduce errors by cashiers and make it easy to control inventory and

track sales of specific products.^22

In the United States, consumer criticism finally led to the passage of the Federal

Fair Packaging and Labeling Act(of 1966)—which requires that consumer goods

be clearly labeled in easy-to-understand terms—to give consumers more informa-

tion. The law also calls on industry to try to reduce the number of package sizes

and make labels more useful. Since then there have been further guidelines. The

most far-reaching are based on the Nutrition Labeling and Education Act of 1990.

It requires food manufacturers to use a uniform format and disclose what is in their

products. The idea was to allow consumers to compare the nutritional value of dif-

ferent products. That could be a plus, and may even lead to healthier diets.

However, the Food and Drug Administration estimated that the total cost to change

250,000 food labels in the U.S. marketplace was over $1.4 billion. Ultimately,

all consumers shared the cost of those changes, whether they use the information

or not.^23

Packaging sends
a message

Packaging may lower
distribution costs

Universal product
codes speed handling

Laws reduce confusion
and clutter

7033000105

What Is Socially Responsible Packaging?

Internet

Internet Exercise The FDA’s website has a page on the food label require-

ments that proclaims “grocery store aisles have become avenues to greater

nutritional knowledge.” Go to that page at Internet address (www.fda.gov/

opacom/backgrounders/foodlabel/newlabel.html) and review the actual label

requirements. Do you use this information in deciding what products to buy?