In a highly competitive business environment partly due to global trade liberalization, many industries face keen product and / or price competition that succeeds in lowering profits to unhealthy levels (Kotler & Rath, 1983). One of the few strategic initiatives that companies can adopt to be competitive and to protect and improve market position is to design superior packaging for their target market (Rettie & Brewer, 2000). Packaging has accompanied mankind from many years ago when primitive humans lived as nomadic hunters and gatherers.
Wraps of leaves, shells of nuts, animal skins and hollow wood pieces were used in those days (WPO, 2008). Since those times, packaging has evolved to the modern-day packaging.
Even though, packaging is perceived to be a negative and unnecessary cost to society, without packaging, materials handling and modern customer marketing would be costly, inefficient and virtually impracticable (Simms & Trott, 2010; Lockamy III, 1995; Robertson, 2013).
Packaging has created a platform for customers to have a wide range of products to choose from, eliminated seasonality of some products and provided a service in the context of busy lifestyles (Stewart, 2007). The distribution of goods is a backbone in modern society due to changes in customer lifestyle and self-service. Customers have been demanding smaller quantities of products and, coupled with increasing distances between the point of manufacturing and consumption, have made packaging more important in the distribution chain (Jahre & Hattland, 2004).
In response to new trends in customer lifestyle and business environment, many retail firms as well as food services companies, have been established. The growth of these firms has largely
depended on a combination of a highly competitive superior logistics which are sustained by packaging innovations and marketing (Coles, 2003). Thus, package innovation has revolutionized the modern distribution systems for meeting new customer demands and driven market growth in the customer goods market. For example, Tetra Pak has invented an “aseptic”
package to enable dairy products to be distributed over long distances and also to enable them to be kept in the store shelves without refrigerator trucks and facilities (WPO, 2008).
It has been asserted that packaging has played an essential role in customers` lifestyle and the manner in which businesses are organised (Bundh, 2005; 2009). A lot of packaging has been designed for containerization or to fit pallet sizes to facilitate export trade (Bundh, 2009).
Through packaging, the production of large volumes of commodities on a daily basis can be managed, while non-durable goods can be transported over long distances the world over.
Globally, packaging has become a vital tool to facilitate trade and economic growth, especially, in the emerging markets (WPO, 2008). It is argued that innovative packaging provides cost- effective ways of preserving and sustaining world resources by maximizing the products` shelf life, and thus safeguarding the products before final consumption (Coles, 2003). The author further noted that a significant proportion of food production is wasted in many developing countries ranging from 30% to 50%, whilst in developed economies the percentage is relatively insignificant ranging between 2% and 3% due to efficient processing, packaging and distribution systems. The product package (that is, to contain, preserve, protect and inform) has improved safety and health, and the overall quality of the life of people (Coles, 2003; WPO, 2011).
However, the use of many forms of packaging across different parts of the globe depends upon the extent of development, and hence the per capita consumption in industrialized countries is considerably higher than in less developed economies (Bundh, 2005). The World Packaging Organization (2009) suggested that packaging is an important component of trade in some of the developed world, whilst it satisfies logistical needs of the distribution chain in most of the developing countries.
The global turnover of the packaging industry was estimated around US$500 billion in 2008, with the sales of packaging container contributing a larger proportion and packaging machinery accounting for about US$25 billion (WPO, 2008). In the United Kingdom, the packaging industry` total revenue was GB£11 billion per year and employed about 85 000 people
representing 3% of the total labour force in the manufacturing sector. It was also among the top ten manufacturing industries and contributed about GB£12 billion annually to the United Kingdom`s economy (Packaging Federation, 2015).
Furthermore, the packaging industry contributed a sum of R43 billion to the economy of South Africa which accounted for nearly 1.5% of total Gross Domestic Product (GDP) of R2.86 trillion in 2012. Nor is this all, the contributions of almost all the other industries to GDP largely depended on the packaging innovations (WPO, 2014).
The growth in the packaging industry was attributed to increased global trade, smaller family size, new trends in lifestyle and search for convenience (Bundh, 2005). Indeed, packaging is an important driver of growth in customer and industrial markets, and its usage is increasing consistently with the global economy.
2.4.1 Pharmaceutical Packaging Industry
It has been emphasized that packaging has contributed significantly to the development of drug industry as it has become an integral component of the drug delivery system. Packaging used to be considered an afterthought by many pharmaceutical companies. Packaging has been widely acknowledged as an essential part of medicinal product whose shelf-life can only be guaranteed in its packed state (El-Meniawy, 1991).
The global pharmaceutical industry has increased with annual growth rate of about 5% per year from 2010 to 2017 (Kunal, Akhilesh, & Kumar, 2012). The authors further stated that the rate of growth has been more visible in emerging countries like China and India due to the rapid expansion of outsourcing activities and generics in these economies. In 2010, the world drug packaging market was valued at US$47.8 billion and was predicted to increase at a compound annual growth rate (CAGR) of 7.3% from 2010 to 2017 to an amount of US$78 billion by 2017. The packaging market in advanced countries like Japan, United States and Western Europe accounts for more than 70 percent of this value, though China presents rapid growth opportunities. It is also estimated that the global market for medicinal product packaging was predicted to increase at 5.5 percent yearly from 2010 to 2015. While the world packaging industry was valued at US$424 billion in 2010, the global pharmaceutical packaging industry accounted for approximately 5% of this amount (ibid).
In their view, the main drivers of growth of pharmaceutical packaging industry were integration, advances in manufacturing processes and technological development. The authors further stated that the pharmaceutical packaging industry has been growing as the patent of drugs worth about US$142 billion expired in 2017 which could lead to increase in generic market and the pharmaceutical industry as whole. Moreover, constant innovations in pharmaceutical products have had a direct impact on pharmaceutical packaging.
Munzel (2007) is also of the view that legal changes, the introduction of new medicines and technological development have resulted in constant changing in packaging requirements in the pharmaceutical industry. Traditionally, close to 51 percent of medicines made up of capsules or tablets were taken orally and they were either packed in blister packaging or fed into plastic pharmaceutical bottles. Liquids, pastilles and powders also form part of the drugs which were taken orally. However, many oral tablets have come with different shapes and sizes. Coupled with this, other methods for taking medicines have been increasingly gaining popularity. These include transdermal (3%), inhalation (17%) and parenteral (29%). These developments in the pharmaceutical industry have contributed tremendously to promote the pharmaceutical packaging industry (Kunal et al., 2012).
2.4.2 Conceptualization of Packaging
Packaging has been defined in several ways by many authors in different academic disciplines.
According to Jadhav, Zalte, and Saudagar (2014:194), packaging is a “science, art and technology of enclosing or protecting products for distribution, storage, sale and use”. The author further stated that packaging is the process of designing, evaluation and fabrication of packages. A product`s package is also related to the container, closure, carton, and box components.
Kunal et al. (2012: 1) also defined packaging as “an economical means of providing presentation, protection, identification, information, containment, convenience and compliance for a product during storage, carriage and display until the product is consumed.”
Natarajan, Govindrajan, and Kumar (2015: 15) described packaging as the “art, science and technology of preparing and encapsulating goods for the market”. The authors further stated that packaging is a “co-ordinated system of preparing goods for transport, distribution, storage,
retailing and end-use”. Thus, packaging ensures the safe delivery of goods to the end-user at a minimum cost while maximising sales.
Packaging is also described as designing and producing the container or wrapper for a product (Kotler et al., 2002), whilst the label relates to the simple tag fixed to the product or an elaborately design graphic on the package that conveys the brand name and the printed information to the end-user (Kotler, 2003). Kotler et al. (2002) noted that, labelling is an aspect of packaging.
Alternatively, Agariya, Johari, Sharma, Chandraul, and Singh (2012) noted that packaging is the wrapping material that surrounds a product to contain, identify, describe, protect, display, promote, and for the purpose of making the product clean and marketable.
Brassington and Pettit (2003) also suggested that, packaging is a container or wrapping in which the product is offered for sale. Arens (1996) cited by Kuvykaite et al. (2009: 53), also defines packaging as “the container for a product-encompassing the physical appearance of the container and including the design, colour, shape, labelling and materials used”.
Hassan, Leng, & Peng (2012)highlighted that packaging is a container which holds, protects, preserves and facilitates the handling and commercialization of products.
Clearly, many authors have conceptualized packaging in terms of its functions, whilst others have related packaging to a container for the product as well as its appearance. However, Kotler (2003) is one of the few authors who has described packaging as an activity. In this study, packaging is seen as the container of the product including its appearance and hence, the definition proposed by Arens 1996 cited in Kuvykaite et al. (2009) will be adopted in this thesis.
A package for a product may consist of a primary container which is in immediate contact with the product. The role of the first phase of product package is to hold and protect the product against any substances that can make it unwholesome. The second phase of package contains the primary container and is usually discarded during the consumption of the product. The primary purpose of secondary packaging is to aid identification and provide additional protection needed to ensure safe-keeping of the product at the warehouse and for reuse of the
product container. Finally, the third category of product container is the shipping or tertiary package which unitizes the primary and secondary packages and serves to identify and protect them throughout the distribution chain of the products (Kotler et al., 2002).
Packaging is recognized as an essential aspect of the core product and the brand (Ampuero &
Vila, 2006; Underwood, 2003; Chirag, Tyagi, Jaimin, Pinkesh, & Parasher, 2012). Simms and Trott (2010) suggested that, products in the customer goods market appear to be highly characterized by packaging to such an extent that it cannot be detached from the core product.
Gonzalez, Thornsburg, and Twede (2007) also pointed out that, in most cases, the primary packaging forms part of the actual product and the brand, and they are intertwined.
However, Keller (1993) is of the view that packaging aids the buying and consumption of a product but it is not an ingredient of the product itself. Additionally, most authors in the contemporary marketing consider packaging as a component of product strategy which is an essential element of the marketing mix (Kotler, 2003; Kotler & Keller, 2009; Brassington &
Petitt, 2007; El-Meniawy, 1991). However, Kotler (2003) pointed out that some authors also recognize packaging as a fifth “P” in addition to place, price, product and promotion in the marketing mix model.
2.4.3 Elements of Good Packaging Design
Griffin et al. (1995) referenced by Agariya et al. (2012) suggested that elements of good packaging design include; attraction of customers’ attention, transmitting information, creating desire and selling the product.
Attraction-of-Attention
Packaging must create visible impact on the shelf by differentiating itself from other competing products. The package must draw and grab potential buyers` attention and assists existing customers to identify the brand. This can be achieved by effectively combining the colours, shape, logo and other characteristics of packaging design (ibid).
Communication–Information
According to the authors package designed must clearly signal to the buyer the contents of the product, its use and instructions as well as the outcome after usage. All other relevant
information must be directly or indirectly conveyed to the prospective purchaser through the design. Directly, the packaging must describe the product, its features and benefits, and the method of application. More importantly, the packaging characteristics, such as the shape, colour, design forms, and graphics can be implicitly used to transfer the intrinsic attributes of the product to the customer. Printed information on the label relating to the contents, instructions for use and that required by law must be legible, simple and understandable to assist the customer in product choice (ibid).
Create desire for the package
A well-designed package must point out to customers that the product could satisfy their needs or give them inner satisfaction. According to Robertson (1993), a distinctive package must show the contents of the product and powerfully communicate to the customer the satisfaction the product offers. Innovation in packaging technology has added several convenient features to a package to meet the ever-changing demands of customers for convenient purchases.
Selling the product
Effective packaging design does not only stimulate demand for the product but also supports loyalty of the brand. Thus, an appealing packaging must transfer extra benefits to customers such as easy dispensing devices, special give-always and re-usable benefits to facilitate repeat purchases (Griffin et al. 1995 cited by Agariya et al., 2012).