- December 01, 2010, By Boris Oglesby, MWV Packaging Resources Group
With marketing communication shifting from traditional to more ethereal channels such as social networking, consumer product goods (CPG) companies are developing a fresh appreciation for the role of packaging in reinforcing their brand's image. The package remains one of the more concrete interactions between the consumer and the brand.
This trait is particularly relevant for industries with restricted marketing capacity, such as the tobacco industry. Regulations triggered by public health concerns have driven tobacco marketing out of more traditional outlets.
The Evolution of Brand Development
The shift of consumer media consumption from traditional to online is rising at an exponential rate. Today, social media is the number one activity on the web.
Comparing the growth of social media to other communication channels, it took radio 38 years to reach 50 million users, TV 13 years, and the Internet four years. Facebook has added more than 200 million users in less than a year. Social media isn't a fad, it's a fundamental shift in the way we communicate.1
The rise of online media and social networking has had a dramatic impact on how brands choose to communicate with their audience. For example, in 2009, Pepsi ended its 23-consecutive-year streak of “event” advertising in the Super Bowl in favor of an ongoing social media campaign.
Furthermore, in August 2009, Duke Univ.'s Fuqua School of Business published the results of a survey of Fortune 1000 chief marketing officers (CMOs) exploring how they planned to allocate their budgets for 2010. The study found that CMOs are decreasing their traditional advertising (print, radio, TV) spend by 7.9% while increasing their overall Internet marketing (online advertising, social media, and search engine optimization) spend by 9.5%.
Delivering the Brand, Beyond the Product
Incorporating social media and other technologies into brand communications is common practice in consumer marketing today. Accompanying this trend is the use of packaging to engage consumers more directly and serving the role of a key connection between physical and online brand experiences.2
CPG brands are starting to take the role of consumer self-identification. Red Bull or Monster? Trident or Extra? Grey Goose or Kettle One? Consumers are now “badging” themselves by the brands they buy.
As a consequence, the most tangible impression of the brand — the package — is of critical importance. As more brands start to occupy the ephemeral emotional space within their consumers' hearts, the validation of that brand in the physical world is required to cement the trust and belief of the consumer and brand relationship.
In short, with fewer exposures to traditional brand imagery, the package serves as the bridge between the promise developed in the virtual world and the image projected in the real world. It might even be said that the transition of marketing to virtual channels could not be accomplished without the physical link that the package provides.
As consumers embrace their role as active communicators, they expect brands to listen. With consumers increasingly tuning out of mainstream media channels and tuning into their portable media players, mobile phones, and social networks, most advertising messages are disappearing in the ether. The truth is that with so much broad-channel advertising lost on consumers, the lowly package may be the last remaining opportunity some brands have left to get noticed.3
Packaging & Tobacco
In certain industries, there is even greater pressure to connect with the audience through packaging. The tobacco industry, for example, has seen a widespread reduction in traditional advertising, promotion, and sponsorships for a variety of reasons.
Regulatory restrictions have limited the use of many of these channels as well as impacted the use of point of sale (POS) marketing in some regions. The increased usage of health warnings and explicit graphics on tobacco products also has reduced billboard opportunities on the package itself (see sidebar).
This creates a challenge not unlike that facing CPG companies and their increased use of social networking channels: How to reinforce a brand's identity without the standard imagery, sponsorships, and advertising? Tobacco marketing restrictions remove brand messaging from consumers' minds, which can create confusion for consumers and impact the point of decision.
The proliferation of current brands with brand extensions creates the need for even greater differentiation at point of purchase, leading packages to serve as the individual's “guide” through their purchasing decision.
For companies to overcome barriers to entry and maintain market leadership positions, defining and repositioning brands with unique packaging solutions is paramount. The package is quickly becoming the tobacco industry's final billboard.
The bottom line is without traditional marketing and advertising channels, the package becomes the last physical link to the consumer. Whether the challenge is to reinforce the brand image of existing brands or to launch new brands, the packaging focus has to be the same: defining the physical presence of a brand's image. Packaging may be a marketer's last opportunity to make that vital connection with the consumer.4
It is no surprise, then, that brands are exploring more premium packaging as a way to enhance the connection between the consumer and the brand. Package design, shape, color, feel, and material choice are proliferating and have become more critical today than ever before. Global or flagship brands have a driving desire to make their package stand out and create a distinct brand statement.
The growing numbers of brand extensions are looking for ways to differentiate themselves from one another and communicate their unique brand identity without diluting the primary brand. With the average consumer taking only three seconds to make their purchasing decision at the point of sale, packaging represents one of the few remaining physical opportunities to do so.
Tobacco packaging will continue to be challenged through regulatory restrictions, further testing a brand's ability to communicate with its target consumers. Without the reinforcement of traditional advertising or marketing channels, packaging, however, still remains the last opportunity to develop brand identity outside the online world and beyond highly regulated communication channels.
Boris Oglesby, is VP, strategic marketing, at MWV. He has worked in a variety of marketing and commercial leadership roles at Kraft Foods, Miller Brewing, and Johnson Diversey. Prior to joining MWV in a consulting capacity this year, Boris was senior VP, marketing and development, for Swedish Match's US and Canadian markets, with a focus in specialty tobacco. Contact him at Boris.Oglesby@mwv.com.
1Socialnomics09. “Social Media Revolution 2 (Refresh).” Socialnomics09's Channel. YouTube, 5 May 2010. Web. 10 May 2010. 2Saven, Mandy. “Social climbing: with the use of social media and other technologies growing, packaging is engaging consumers more directly and becoming the key connection between physical and online brand experiences.” Brand Packaging, p18, Vol. 14, No. 1, Jan. 1, 2010. 3 Mininni, Ted. “Learning To Be A Wrap Artist.” Brandweek, June 2, 2008. 4Mininni, Ted. “Learning To Be A Wrap Artist.” Brandweek, June 2, 2008.
Warning Labels Getting Larger
New regulations by the US Food and Drug Administration (FDA) will make cigarette marketing even tougher next year. Textual warnings and graphic images — some of which are quite graphic — will be required on the upper portion of the front and rear panels of each cigarette package and comprise at least the top 50% of these panels.
The nine warning statements read as follows:
- WARNING: Cigarettes are addictive.
- WARNING: Tobacco smoke can harm your children.
- WARNING: Cigarettes cause fatal lung disease.
- WARNING: Cigarettes cause cancer.
- WARNING: Cigarettes cause strokes and heart disease.
- WARNING: Smoking during pregnancy can harm your baby.
- WARNING: Smoking can kill you.
- WARNING: Tobacco smoke causes fatal lung disease in nonsmokers.
- WARNING: Quitting smoking now greatly reduces serious risks to your health.
From a total of 36 proposed color graphic health warnings, FDA will select nine based on their ability to effectively communicate the health risks of smoking to the public. To learn more, visit www.fda.gov.