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Packaging’s Role in the First Moment of Truth

October 17, 2012

I’ve been reading some articles about Moments of Truth in consumers’ interactions with products, a concept attributed to a 2005 marketing study by Procter & Gamble. 

I broad terms, the First Moment of Truth is when the consumer first encounters the product in the store; the Second Moment of Truth is when the consumer starts using the product.

Depending on store size, the average shopper is exposed to between 30,000 and 100,000 distinct items in a shopping trip.  If you’re like me, the average purchase may be something like 40 – 60 items, which means shoppers have to distill the available items down by a factor of 99.9% to make their product selections.

The time to do so is limited.  The average shopping visit is about 30 minutes. During that time, shoppers are being exposed to 1,000 to 3,000 items per minute – say 25 – 50 per second – as they make their purchase decisions.

Compounding this, shoppers generally do not have a list with them, so purchasing is largely on impulse.  Even if they DO have a list, the products are most likely described generically (e.g., just ketchup, not HEINZ ketchup), leaving them open to brand messages while in the store.

According to P&G, it takes a consumer between 3 and 4 seconds to make a brand selection from a number of competing products in a category.Within the first second of looking at a product category, consumers will have identified which brands they would consider purchasing.  Once the consumer touches the product, there is a high likelihood this will be the one to be purchased.

What are some of the things marketers can do to win this battle? Obviously, as marketers, we’re trained to differentiate our products, but here are some practical ways to do so.

COLOR

If most of your competitors are using a similar color scheme for their products, use a very different color for your product. If, for example, you’re marketing a personal care product and the competition all tend to base their packaging on white, because it connotes purity or cleanliness, use a vivid color such as red or yellow to make it easier for shoppers to spot your product in a shelf display.

Fluorescent colors tend to be especially vivid, and P&G have used these, for example, on TIDE detergent for many years.

SHAPE

We’re seeing more widespread adoption of flexible pouches for products.

If your competition is all in cans or bottles, something like a pouch would stand out from all the rest. Alternatively, in bottles, at least, you have the opportunity to create a unique shape to make your product distinct.

COPY ELEMENTS

Flashes or bursts or other “violators” as they’re known can help create a sense of urgency that can urge a shopper to pick up your product over a competitor’s.

If your product is new, make sure “NEW” is clearly printed on the package for the first 3-4 months the product is on the market. This clearly identifies your product as one the consumer probably has not yet tried.

Product improvements should be highlighted (e.g., “NEW and IMPROVED”)

Bonus packs or contests or on-pack offers should be prominently featured on the principal display panel as limited time offers. This kind of message can prompt a shopper to pick up a great deal at a good price – but only as long as they think the offer is good for a limited time.

I’ll focus on the Second Moment of Truth in my next post.

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A World Without Packaging

April 23, 2012

Any time I hear concerns voiced in the press about solid waste, the first items that springs to mind is most often packaging. It isn’t biodegradable. It isn’t reusable.  It’s excessive. It’s wasteful. It’s unnecessary.

In short, it isn’t valued – at least by the media who help form consumer opinion.

I’d like to devote the next few posts to an exploration of this issue, specifically with regard to the impact packaging has had on reduction of food waste and its power to persuade consumers.

Bear with me.  I’d like to research this topic so you can see facts instead of just my opinions.

 

A World Without Packaging

April 23, 2012

Any time I hear concerns voiced in the press about solid waste, the first items that springs to mind is most often packaging. It isn’t biodegradable. It isn’t reusable.  It’s excessive. It’s wasteful. It’s unnecessary.

In short, it isn’t valued – at least by the media who help form consumer opinion.

I’d like to devote the next few posts to an exploration of this issue, specifically with regard to the impact packaging has had on reduction of food waste and its power to persuade consumers.

Bear with me.  I’d like to research this topic so you can see facts instead of just my opinions.

 

The Package is the New Product

April 17, 2012

Back in September 2010 I wrote about examples where the packaging IS the product.  In that post, most of the products were image  brands, and for these, packaging is ultimately what communicates, if not forms, the brand image.

I may not have posted much for the past year, but I have been working on some new projects as well as product development.

One of the outcomes of this work is that I’ve come up with a product that is, in fact, a functional package, and I’m working on bringing this to market.

Once the product is launched, I’ll post an update so you can see it and I’ll explain how it works.

Plastic Packaging Boosts Sales … and boosts profits even more!

March 10, 2011

My association with PINE-SOL liquid cleaner was another key factor in becoming passionate about the power of packaging.

I joined Cyanamid’s Shulton division in a marketing role and spent my first year there working on OLD SPICE, the company’s flagship brand.  Guess some folks thought I knew a lot about packaging because I’d worked on transitioning the OLD SPICE gift set product line from setup boxes to folding cartons and had found a way for the brand’s deodorant and shave cream lines to be packed in lithographed cans (as opposed to plain cans with a paper label).  After a year on the job, I was offered a position in Operations as packaging and product development manager.

The major project in this position was to develop a plastic bottle for PINE-SOL. The major challenge in this project was that one of the ingredients in PINE-SOL was an aggressive solvent which was one component in the pine oil used as a disinfecting and deodorizing agent.  This solvent would dissolve most polymers, such as polyethylene, that were used in making bottles.  There were some other features that Marketing wanted in the new plastic package – crystal clarity (to replicate the look of glass), impact resistance and cost – that added to the challenge.

I don’t have any photographs of the product from my time on the brand, but here is a US television commercial that illustrates how the PINE-SOL package used to look.

As a novice in packaging, I was fortunate to be able to work with some brilliant packaging engineers from our US parent company.  After testing a number of different resins, we finally found one that met all the criteria marketing has asked for.  I worked with the blow molder and package designer to refine the bottle to deliver the required impact resistance and, about 14 months after I had started on the project, the new package was ready to go. We were the first Shulton operation to put PINE-SOL in a plastic container!

The purpose of this post isn’t to describe all the technical challenges in creating this package, but I wanted to provide some context for what follows.

After developing the new plastic bottle, I was moved back into Marketing to be the brand manager on PINE-SOL and oversee the official product relaunch. It was during my time working as the PINE-SOL brand manager that I really saw how much influence on sales and profitability a package could have.

When I started on PINE-SOL, it was the smallest brand in the Shulton stable, after OLD SPICE and BRECK shampoo and also considered to be the least profitable of the brands. Two years later, PINE-SOL was the largest brand, its sales nearly doubling in that time. It also became the most profitable brand after I changed the terms of reference from straight gross margin to economic value added and, by doing so, I was able to persuade the company to keep the brand (instead of divesting) and to actually invest in it.

Now let’s take a closer look at why changing the package had such a huge impact on sales and profitability.

1. Where the product is used.

PINE-SOL is a classic household cleaning brand that was founded on a “Triad of Benefits” – it cleans, disinfects and deodorizes. The second of these benefits – disinfecting – meant PINE-SOL was used primarily in the bathroom, one room in which people can be guaranteed to be barefoot at least some of the time.  The risk of a glass bottle shattering in such an environment was found, in research, to be one key factor holding consumers back from purchasing PINE-SOL. These consumers would prefer to see the brand in a shatterproof plastic bottle.

2. Where the consumers are

Our biggest user base was in the Western Provinces in Canada, which is about as remote from our manufacturing location in Toronto as you can get in Canada. Depending on the province, we were either the #2 brand to Procter & Gamble’s MR CLEAN or the market leader.

We estimated the weight differential for glass over plastic was costing us over $250,000 in additional freight costs, so this provided a strong economic incentive to convert to plastic.

3. Dis-Economies of Scale

Because the Canadian market is only about one-tenth the size of the US market, we were paying a hefty premium for glass bottles compared to what our associates in Shulton USA paid for their glass PINE-SOL bottles.  Based on the volumes we had, we estimated we were paying about another $250,000 in premiums for glass bottles compared with our US sister company.

Glass containers require high volume runs to be efficient, so our small Canadian runs didn’t enable us to get low prices. Plastics had a more forgiving cost-volume curve.

4. It Pays to be Seen

The original PINE-SOL bottle was a waisted glass cylinder, a shape that allows for very space-efficient packing.

However, on retail grocery shelves, the product tended to get lost for two reasons:

  1. The primary competitor, MR. CLEAN, came in an oval shaped bottle that was about 30% wider than a PINE-SOL bottle, and so there was just more of it to be seen by shoppers than our product.
  2. The colors of the original PINE-SOL label were predominately dark green and black, with PINE-SOL lettered in yellow.  Overall the colors rendered the PINE-SOL package very recessive, so it certainly didn’t shout out to consumers to be picked up. The colors also made the product look “dirty” – not a good perception for a cleaning product!

We redesigned the plastic bottle to have an oval profile, while retaining the waisted shape and some other design elements from the glass pack.  Our new pack had a similar facing to MR. CLEAN, which also allowed us to place 33% more product on the shelf when we replaced facings of old bottles with facings of the new oval bottle.

Having more product on the shelf per facing also allowed us to slash stockouts.  In a grocery environment, if a product is not available when the consumer is shopping, they are likely to purchase a competitor’s product, which means a lost sales opportunity.  By retaining our facings and increasing on-shelf  inventory,  we were able to prevent those lost sales and retain our customer loyalty.

For continuity’s sake, we kept the color scheme green, black and yellow. However, we changed the green to a much richer, cleaner tone. We kept the PINE-SOL lettering in yellow, but changed to a much bolder font. The combination of a new green and more prominent yellow gave the package a much cleaner look, and made the presentation simply more contemporary.

PINE-SOL Label Circa 1979. Thanks to The Clorox Company

PINE-SOL Label Circa 1981. Thanks to The Clorox Company

Courtesy of DDB, here’s another commercial that illustrates the new look of the product.

http://www.youtube.com/watch?v=QzL0U9_Rzcs

The growth that we realized on PINE-SOL came largely in the absence of consumer advertising.  Pretty amazing performance for a product that was sold at a 35-40% premium vs. its number one competitor.  We did a small amount of regional television advertising, but nothing on a national scale until the brand had grown so much that management wanted to sustain the momentum.  So the packaging was a major success factor in the brand’s growth.

Our Operations people even made a contribution to the marketing of PINE-SOL.  Our Director of Operations noted that PINE-SOL had a significant refractive index and suggested we could leverage this in consumer contests.  We created the PINE-SOL “Magic Window”, which was a rectangular diecut opening in the back label that enabled the consumer to see the back side of the front label.  By printing a winning message on the back side of the front label, positioned directly opposite the “Magic Window”, the refractive index of the product prevented the consumer from seeing the message until they had consumed sufficient product that the level of the product was below the bottom of the window.

We had a gallon-size glass jug of PINE-SOL that was primarily intended for institutional use.  One kind of institution that wanted to by PINE-SOL, but was reluctant to do so was the prison system.  A glass container could quickly become a weapon in the hands of an inmate.  So we invested in a mold to produce a gallon-sized plastic jug, and this also contributed to the growth of the brand.

Summary

So the conversion of PINE-SOL from a glass bottle to a plastic bottle played a huge role in the brand’s success:

  1. It enabled us to overcome one of the biggest objections consumers cited about purchasing the brand.
  2. It ended up adding over $1MM per year in profits, through cost savings and freight savings
  3. It helped ensure the product was available when the consumer was shopping.
Just as a footnote, The Clorox Company acquired the PINE-SOL brand from Shulton in 1990.  I’m very grateful they have an archive of historical PINE-SOL labels that I was able to use in this post.

Hitting the Sweet Spot

February 11, 2011

I want to continue describing some of the experiences I had in my career that influenced how I feel about packaging. Today’s post is about another project from my packaged goods days.

I was recruited into Cadbury Canada to work as the brand manager on CARAMILK, an iconic confectionery brand in Canada and a fun brand to work on.  One reason I was brought into Cadbury was that market share CARAMILK had been steadily declining over a 7-year period and the brand was in danger of losing it’s spot as #1 chocolate bar brand in Canada.  The other reason I was brought in was to oversee the launch of a new format for CARAMILK.

The parent company of Cadbury Canada, Peter Paul Cadbury as it was known, was launching a counter display of a miniature version of CARAMELLO – the international brand on which CARAMILK was based.  The concept behind this was to increase trial of CARAMELLO by introducing a miniature/sample sized bar through a counter display that stimulated impulse purchase.  The product was to be priced at 10-15 cents to further induce impulse purchase.

The US CARAMELLO product was to be produced at Cadbury Canada’s plant and a special line was installed there exclusively for this product.

I have to admit I wasn’t impressed when I saw the packaging for the US product.  The individual pieces were flow-wrapped in an OPP film and placed in a standard bin type box whose lid would form a header when opened and folded back.

This product was targeted for gas stations, C-stores, restaurants and so on and was meant to be situated on the counter near the cash register – an area operators normally like to have uncluttered and for which the space is really valuable.

We chose to go for a different format from the US version.  Our goal was to design a self-contained unit that was so easy for the customer to use that it became hard to refuse to purchase one.

The Original CARAMILK Changemaker Counter Display

First, we designed the unit to stand vertically, rather than horizontally, to minimize its footprint and make it easier for customer to find a place for it on a counter.

Second, because the pieces were small, we designed the unit to be gravity fed so, regardless of the amount in the box, it was always forced to the bottom and front of the box so the consumer could always see and be tempted by it.

Third, we used a corrugated litho laminate construction to ensure it was durable and had strong branding.  We felt this projected a better image than using a unit made from folding paperboard.

Fourth, instead of using an outer shipper, we simply used a plastic band to seal the unit as it went through the distribution channel.  All the retailer had to do was snip the band and pull open the flap at the bottom.

Lastly, when the retailer opened the unit, he found two pressure-sensitive labels with two different price points – 15 cents or 2 for 25 cents – that he could place in a designated area on the box.  We wanted the consumer to be reassured that the price being charged was fair by using something that was clearly pre-printed, so the consumer would not feel the retailer was being arbitrary or unreasonable in pricing the product (which they probably would do in pen or marker).

For the primary package, we selected a metallized OPP film which we gravure printed in the CARAMILK colors – white, brown and gold.  We made the gold a transparent color so, with the metallized film in behind it, it looked sparkly to help ensure it caught the eye of the consumer.

When we presented our launch plan for the product, we were told our forecast sales would only require about 13 shifts on the line installed by the US parent company, so it should be possible to have the capacity available for our needs.

When we launched the product, it sold beyond our wildest dreams.  We sold our entire Year 1 budget in 13 weeks.

CARAMILK Gravity-Fed Counter Display for regular-sized bars.

The success prompted us to find other uses for the molds used to make the miniature product.  We came out with a DAIRY MILK version soon after, and saw an opportunity to make the miniature format the version we should use for the Halloween program for both the CARAMILK and DAIRY MILK brands.  The concept of a gravity feed display unit also led to Cadbury using it at one point for the regular size parent CARAMILK bar. I’ve included a photo of this to illustrate.

In the end, the Canadian requirements took over the bulk of the time on the production line while still leaving enough time to fulfill US requirements.

One of the things I learned from this experience was that making your product easy to use can be a huge influence in getting customers to purchase your product.

Another was that it can be worth the incremental investment to make the product look truly appealing. The additional cost of metallized  vs. non-metallized film paid off. Not only did it offer better shelf life, but the product took on a premium look because of the metallic effects.

Admittedly, CARAMILK is a brand whose reputation has been built through advertising (and great advertising it’s been).  However, we never promoted the counter display and I think it sold on its own merits – trusted name, great presentation and ease of use.

A footnote to all of this is that, a little over 10 years later, I became Director of Sales and Marketing for Norampac’s Lithotech Division.  This was the supplier I worked with to develop the original counter display unit.  Having experienced the power of litho laminate packaging, it was not hard for me to sell this concept to other customers, and I was able to help Lithotech grow from a money-losing business to the most profitable in Norampac’s stable of companies.

Starting a Tradition of Packaging

February 5, 2011

Brochure for the original Lowney Snack Size Product Line

My first exposure to the power of packaging came when I graduated from business school.

I started working for Standard Brands‘ confectionery division, Lowney’s, and worked in the Boxed Chocolates group, which consisted of POT of GOLD boxed chocolates, Valentine’s Day Boxed Chocolates, Bulk chocolates and New Products.  I was assigned to the last two – Bulk and New Products.

One of my product lines consisted of chocolate morsels packed in cello bags.  The presentation was hardly what you’d call appetizing and usually the only place I could find these products was the bottom shelf of a drug store display.  In these nether regions, it was hard to spot the product because it was so dark in color.

Another problem was that, when the product was exposed to heat, it would begin to melt and leave brown smears over the inside of the cello bag.

Not surprisingly, this product line was not generating anything spectacular in the way of sales.

Within a few weeks of joining the company, I got the idea of putting the cello bag inside a folding carton and, after presenting the business plan, received approval to implement.

Putting the cello bag inside a carton did a number of things:

  1. It enabled the product to be merchandised much closer to eye level.
  2. It enabled us to print brighter, more appetizing graphics on the front panel to appeal to shoppers
  3. It provided us a platform to claim “Sealed to preserve freshness”
  4. The carton would hide any signs of melting. (while it wouldn’t impact product safety or flavor, it just looked unappetizing.
Our goal was to offer the product for an everyday price of $1.09 and feature at 99 cents, which, in those, days, was fairly aggressive. For the five flavors we had in the product line, we adopted a common size carton and weight declaration to help reduce line changeover costs in the plant and to present a consistent brand presence on shelf.
The product was launched in 1978, and quickly became one of the division’s top-selling product lines.  The improved merchandisability of the carton made it appealing to not only drug stores, but also mass merchandisers, so it gained distribution as a result of the package change.  The product line has never been advertised and about the only print it gets is in weekly flyers when it’s on special.
Today, the product has changed little from its original concept, though it’s now marketed by Hershey Canada.
I can still find the product in the same size box as in 1978 and it still gets featured at 99 cents. The box still declares, “Sealed to preserve freshness”.  One thing that has changed is that the product line has more flavors. When we launched, OH HENRY, GLOSETTES and BRIDGE MIXTURE were part of another brand group and we didn’t have permission to package these brands in the new format.  That’s since changed, so the line now has some brand identity it previously did not have.
The results from just making a change to the packaging format were amazing.  We made no other changes to the product.
This was just my first success with packaging.  I’ll share some more in future posts.