Importance Of Product Labeling And Positioning In Marketing

Consumers’ Needs and Perception of Product Quality

Question:

Discuss about the Affect Of Labeling On Consumer Purchase.

Consumers are mostly seeking for high quality products at a reasonable price, this is the general conception. But needs change from product to product, the above requirement is for grocery or FMCG products. But if the product is a luxury item or service then the quality and price is both on the higher end. A color scheme or a logo is very important for a brand image; it helps in making an impression on the minds of a person. For example: red and white immediately reminds a person of Coco Cola (Solomon 2014, Vol 10). Customers appreciate if a thought and effort of the company is reflected in the packaging and branding of the product. Labeling is essential for the customers as it not only attracts the customers it also provides necessary information about the product or service. As the label on a product provides information about the price, quantity, quality etc, consumers can understand and identify the standard and grade of the item. The products are. Customers can easily compare the product with the items of the same category and choose which will suite the requirement best and purchase accordingly.

External factors of the business environments are the ones which are not under the control of the business organization the six aspects are: government policies of the area of operation, natural forces, competition, technology, demographic factor and societal factors.

In Australia, government has some set rules as to what has to be mandatorily mentioned in the label. For example: According to the Competition and Consumer Act 2010 (CCA), a seller cannot provide the consumer with give false, deceptive or misleading information. There are various industry specific guidelines and regulations as well which business organizations have to comply with. The sellers are expected to be aware of the obligations under Australian Consumer Law (ACL) if they claim to be made in Australia.

Technology used to create a product has to be mentioned as it increases the value of the product. For example: if the product is vegan and cruelty free it should be highlighted on the label as it increases the goodwill of the product and garners positive response (Andrews et al. 2014).

The utilitarian value if the amount of utility that a customer derives from a particular product or service that he or she has purchased keeping in mind the requirement of the products and the price associated with the product. It is essential as it brings out the real worth of the product or service. Examples: marketing of I Phone as it focuses on the prime feature of the device and gives an alluring experience to the user and Amazon markets itself as a place where an individual can find anything from A to Z.

External Factors That Affect the Business Environment

Hedonic value

It can be defined as the element of a consumer apparent value which is associated with the senses, feelings, and emotions particularly pertaining to pleasure. Hedonic means something that is related to utility. Examples: Marketing of quality walls magnum ice cream where the focus is on the indulgence of Belgium chocolate in the making of the ice cream that offers a rich taste. Marketing of any premium luxury brand is a perfect example of hedonic value like Dior perfumes and Gucci handbags etc ( Etemad-Sajadi  and Lassaad  2015, 84).

Reasons for purchase

Maslow’s need hierarchy theory is based on the needs and requirements of the people. Demand or need is the basic reason for a person to purchase items. These needs raise upward form necessity to luxury depending on the purchase power and disposable income of an individual. Form the consumers perspective there are some of the major reasons of purchase: requirement of the product backed by the reasonable price of the product is the prime reason why a consumers buys a product. Furthermore, a customer sometimes gets inspired by someone else using a particular product and buys it even if he or she doesn’t want it. Sense of pride is also one of the reasons for purchase. For example: if a person always wanted to buy a Fendi Handbag, the ownership of such an item is a matter of pride and accomplishment in the life of that person.

Organic labeled products

In Australia, an organization cannot label a product ‘organic’ if it does not abide by the regulations laid down by the Australian Standard (AS 6000).  The company first of all has to get certificate for providing such information on the label by institutions that are accredited by the Department of Agriculture, Fisheries and Forestry.

The products which are indicated to be organic should be result of farming that avoids the usage of man-made fertilizers and pesticides, growth regulators and additives. Apart from this, products which include genetically modified organisms (GMOs) are also prohibited from claiming the organic tag.

Environmental sustainability is the prime idea of organic products along with implementation of innovation in the production of the item. To participate in sustainably and the idea of using pure and non-chemical goods initiates the consumers to buy organic products over any chemical infused goods.

“Made in Australia” label

For the products that want to label “Made in Australia”, has to follow certain policies and regulations as laid down by the government. An item if has been developed and  underwent changes in its last substantial transformation in that country can be deemed as “made” in that particular nation. It does not necessarily have to mean that all the ingredients in developing the product has been originated in Australia, it means that the product has been proceed to be the end good so that it is ready for the consumer to use ( Hersey et al. 2013, 1-14).

Technology, Organic Labeling, and ‘Made in Australia’ Labels

The addition to a known response to stimuli that is similar to the trained stimulus. To stand out in the crowd of the market companies use packaging and presentation this is called stimulus discrimination.

Examples of Stimulus generalization is the presentation of Nutella chocolate spread and Hintz chocolate spread. It is difficult to spot the difference in packaging in the two items. Only the labels used are different. Converse is a company that has a patent design of shoes is another example of stimulus generalization where the look and presentation is replicated by many shoe companies ( Jeitschko et al. 2017).

In the marketplace, stimulus discrimination can be used in a number of ways. For example: Pepsi and Coco Cola are competitors who sell similar products to the same target market, the point of discrimination is the color of the brand, logo of the brand etc (Wells 2014, 1119-1158).

Positioning is influencing the perception of the consumer about a particular brand in comparison to the competitors in the industry. Its aim of position a brand or a product is to capture a clear, unique, and beneficial place in the minds of the consumers.

In the 1^st advertisement, positioning of these pair of sneakers in this advertisement published by Converse brand is youthful and sporty. Converse is a brand that is associated with young people, people who are young at heart and loves colors in their life and is not scared of taking fashion risks in terms of colors.  Converse is a brand that is old and has established itself as a generic name for the design of sneakers that they make. In this advertisement the youthfulness is being displayed by the way the shoes are kept ( Ebitu et al. 2012). The prime focus of the ad is the color as before reading the tag line or even noticing the shoe the orange color has been given importance. Orange is a color that constitutes of red which means energy and vigor along with yellow that signifies happiness and cheerfulness. The culmination of these two colors give sets the stage for a frolic mood in the advertisement which instantly gives the viewer an idea of being youthful. Usually sneakers are associated with sportswear and the company wants to break that monotone of the image in placing it in the minds of the customers as a casual wear instead of being sporty or used for sports purpose.

Utilitarian Value and Hedonic Value in Marketing

In the second print ad of timberland, the company has positioned the brand as a rough and tough item that can meet the harsh and extreme terrain. Hence, the positioning of the sneakers form timber land has an adventurous as well as a rigid positioning strategy. Timberland is a brand that is associated and perceived by the consumers as adventure friendly durable pair of shoes which is also reliable by the consumers to use. In the advertisement what immediately strikes the reader first is the pair of shoes and then the image behind it which complete sets the mood of an adventure trip along with friends. The positioning is again different form the competitors as itself as youthful yet adventurous and reliable. The Advertisement has a red undertone to the ad which expresses energy and excitement as is the image of the people behind the shoes.

The positioning base of the products are on the same line but are completely different one another the converse advertisement has a casual frolic approach to it along with it being youthful and fashionable while, the timberland Advertisement is also targeted to the youth but has an adventurous, rough and tough reliable approach in its positioning. It does not position it as a fashionable item but a pair that can survive even on the rough terrain. In both the advertisement the base of positioning is the attribute and the application of the item despite of the same positioning base the difference lies in the product itself and the way it is positioned is different in its own term ( Sirianni et al. 2013, 108-123).

The three bases of segmentation that has been utilized by the brands in the above advertisements are as follows: firstly is demographic- the target market of converse is the young people who are college goers and the young adults who take out time to go clubbing or goes out with friends very often ( Anderson and Xiaoqing 2014, 263-272). The age group targeted by the company is in between 16-35. For the timberland and the demographic is the same as converse there are also young people featured in the advertisement. The occupations of the people targeted by both the brands are either young professionals or students (Hampel et al. 2012, 118-127). Secondly behavioral- the color scheme of the converse advertisement show that the shoes are targeted towards people who are fashion conscious and takes risks in terms color and style. Whereas the timberland ad targets people who are adventurous and tourists at heart and loves a fun get out with friends. Both the shoes are unisex and hence the target market has a wide perception ( Dey et al. 2014). Thirdly psychographic: the tag line used in the converse advertisement suggest an edgy side of an individual, the term orange is used as a subject gives an idea of creativity and risk taking attitude. While, in the timberland advertisement the color scheme and the tag line shows the rough and tough side of the shoe and depicts the same psychographic characteristic in the target market. An individual who will opt to buy an orange color pair of shoe is a person who gives a lot of thought while dressing up and putting a look together. Whereas the timberland shoes are perfect to wear if a person is on an adventure trip revealing the adventurous side of the target market (Dolnicar 2014, 296-306)

Reasons for Purchase

Among the two advertisements the converse ad has more impact on the reader owing all the credit to the color that has been chosen by the company. The company could have used a black background to create dimension in between the background and the foreground but they chose to stick to the color of the pair of shoe as that is what they have tried to draw the attention of the reader. The design of the shoe is the classic converse by the unique color of the product is the USP in this case (Anatasia et al. 2016).

On the other hand the timberland advertisement has a lot of elements cramped in the one canvas. The background has three people along with a landscape and the foreground has the pair of shoes which along with the brand name and the tagline. It lacks in capturing the attention of a person and delivering the message. A reader has to carefully go through the ad in order to understand the significance of it and what the company is trying to communicate.

The converse advertisement is spot on in its idea and execution whereas the timberland ad lacks creativity and is like any other shoe’s company advertisement (McAlister et al. 2016).

References:

Anatasia, Velly, Sunitarya Sunitarya, and Vinda Adriana. 2016. “The Effects Of Advertising Strategies On Consumer Trust: A Case Of Skin Care Products In Taiwan”. Binus Business Review 7 (2): 125. doi:10.21512/bbr.v7i2.1585.

Anderson, Chris K., and Xiaoqing Xie. 2014. “Pricing and market segmentation using opaque selling mechanisms.” European Journal of Operational Research 233, no. 1: 263-272.

Andrews, J. Craig, Chung-Tung Jordan Lin, Alan S. Levy, and Serena Lo. 2014. “Consumer research needs from the food and drug administration on front-of-package nutritional labeling.” American Marketing Association.

Dey, Debabrata, Atanu Lahiri, and Guoying Zhang. 2014. “Quality Competition and Market Segmentation in the Security Software Market.” Mis Quarterly 38, no. 2.

Dolnicar, Sara, Bettina Grün, Friedrich Leisch, and Kathrin Schmidt. 2014. “Required sample sizes for data-driven market segmentation analyses in tourism.” Journal of Travel Research 53, no. 3: 296-306.

Ebitu, Ezekiel Tom, Patrick Awok Mbum, and Abigail Edem Okon. 2012. “An Exploration Of Emotional Intelligence And Market Segmentation, Targeting And Positioning In Selected Centralbusiness Districts In Nigeria”. International Journal Of Marketing Studies 4 (3). doi:10.5539/ijms.v4n3p173.

Etemad-Sajadi, Reza, and Lassaad Ghachem. 2015. “The Impact Of Hedonic And Utilitarian Value Of Online Avatars On E-Service Quality”. Computers In Human Behavior 52: 81-86. doi:10.1016/j.chb.2015.05.048.

Hampel, Stefan, Daniel Heinrich, and Colin Campbell. 2012. “Is An Advertisement Worth The Paper It’s Printed On?”. Journal Of Advertising Research 52 (1): 118-127. doi:10.2501/jar-52-1-118-127.

Hersey, James C., Kelly C. Wohlgenant, Joanne E. Arsenault, Katherine M. Kosa, and Mary K. Muth. 2013. “Effects of front?of?package and shelf nutrition labeling systems on consumers.” Nutrition reviews 71, no. 1: 1-14.

Jeitschko, Thomas D., Yeonjei Jung, and Jaesoo Kim. 2017.”Bundling and joint marketing by rival firms.” Journal of Economics & Management Strategy.

McAlister, Leigh, Raji Srinivasan, Niket Jindal, and Albert A. Cannella. 2016. “Advertising effectiveness: The moderating effect of firm strategy.” American Marketing Association.

Sirianni, Nancy J., Mary Jo Bitner, Stephen W. Brown, and Naomi Mandel. 2013. “Branded service encounters: Strategically aligning employee behavior with the brand positioning.” Journal of Marketing 77, no. 6: 108-123 .

Solomon, Michael R. 2014. Consumer behavior: Buying, having, and being. Upper Saddle River, NJ: Prentice Hall. Vol. 10.

Wells, Victoria K. 2014. “Behavioural psychology, marketing and consumer behaviour: a literature review and future research agenda.” Journal of Marketing Management 30, no. 11-12: 1119-1158.