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Marketing Basics - Kotler Philip

Labeling Decisions

In addition, sellers create labels and tags for their goods, i.e. labeling means, which can appear in the form of an uncomplicated tag attached to the product, or a carefully thought-out complex graphic composition, which is an integral part of the package. On the label can be either one brand name of the product, or a large amount of information about it. Even if the seller himself prefers a modest, simple label, the law may require that additional information be posted on it.

Labels perform several functions, and it depends on the seller which ones. At a minimum, the label identifies the product or brand when, say, the name “Sankist” is stamped on oranges. The label may also indicate the type of product. For example, peach canned food is divided into varieties denoted by the letters A, B and C. The label can to some extent describe the product, for example, who, where and when made it, the contents of the package, the procedure for its use and safety precautions when working with it. Finally, the label can promote the product with its attractive graphic design. Some authors distinguish between identifying, variety-indicating, descriptive and propaganda labels.

Labels of well-known brands over time begin to be perceived as old-fashioned and require updating. Since the last decade of the last century, the Ivory soap label has been redone 18 times, gradually changing the size and type of the font. But the label of the Orange Crash non-alcoholic orange drink was substantially redone immediately, as soon as images of fresh fruits began to appear on the labels of competitors' drinks, which contributed to sales growth. Orange Crash created a label with new symbols for freshness, a label with brighter, more saturated colors.

In connection with labels, a number of legal issues have long existed. The label may mislead the consumer, or omit the mention of some important components in the description, or insufficiently state the warnings regarding the safe use of the product. As a result, labeling is governed by a number of federal government laws and state laws. The main legislative act is the Law on the reflection of truth on the packaging and labeling of goods, adopted in 1966. Recently, factors such as the need to indicate the price of a commodity unit (based on the cost of a standard unit of volume or weight), the shelf life of the product (i.e., its shelf life in the store) and its nutritional value (t .e. nutritional value). Before introducing new products to the market, sellers must make sure that all the necessary information is presented on the labels of the new products.

Box 18. Packaging and public policy

Packaging problems are increasingly attracting public attention. When deciding on packaging, market players should consider the following circumstances:

1. Reflection of truth on packaging and labeling. The public is concerned that packaging and labeling may be false or misleading. According to the Law on the Establishment of the Federal Trade Commission, adopted in 1914, deceitful, misleading or deceptive labels and labels, as well as packaging of this type, are considered methods of unfair competition. Consumers are also disturbed by the confusion of the sizes and shapes of packages, making it difficult to conduct price comparisons. In 1966, Congress passed the Act on the Recognition of Truth on Packaging and Labeling of Goods, which established mandatory labeling requirements, encouraged the introduction of additional voluntary standards for uniform packaging within industries and empowered the federal government to introduce regulations on packaging of goods in certain industries. industry. The Department for Quality Control of Food, Drugs and Cosmetics requires manufacturers of food products that have undergone technological processing to reflect in the labeling the nutritional value of these products with a clear indication of the quantitative content of proteins, fats, carbohydrates and calories in each commodity unit, as well as the content of vitamins and minerals as a percentage of the recommended daily requirement of the body. Consumerists are fighting to introduce additional legislative requirements for labeling, requiring an indication of the shelf life of the product (degree of freshness), the price of the unit (based on the cost of a standard unit of volume or weight), grade (quality indicators A, B and C, applied to a number of consumer goods) and percentage composition (i.e. the percentage of the main components in it).

2. Excessive packaging costs. Critics often find the packaging excessive, which, in their opinion, contributes to higher prices for goods. They pay attention to the single-use external packaging, designed for “emission”, and ask about its value to the consumer. They pay attention to the fact that the cost of packaging sometimes exceeds the cost of the goods contained in it. So, for example, the Evian humidifier is nothing more than 5 ounces of natural spring water in an aerosol package. And all this costs $ 5.5. In response, market officials say that critics do not understand all the functions of packaging, that they themselves are striving to reduce costs for it.

3. The use of scarce resources. The growing concern over the shortage of paper, aluminum and other materials puts on the agenda the need for additional efforts by the industry to save packaging materials. For example, the widespread use of non-negotiable, non-returnable bottles required a 17-fold increase in glass consumption compared with the use of multi-turn glass containers. Single-use bottles are at the same time an unproductive waste of energy resources, which we can hardly afford in times of rising energy costs. Some states have laws prohibiting or taxing non-returnable packaging.

4. Environmental pollution. About 40% of all solid waste in the United States is discarded packaging. Most of the packaging eventually turns into garbage in the form of broken bottles and crumpled cans on the streets of cities and beyond. Discarded packaging creates a big problem of solid waste disposal, the solution of which requires enormous labor and energy costs.

All these unresolved issues have heightened public interest in new laws governing packaging production. Market players should be equally concerned about the situation and strive to create environmentally friendly packaging for their products.