What Is Packaging & Labeling in Marketing?

Packaging and labeling do more than protect and identify your company’s products. They play a vital role in developing your image and brand within your target market. Failing to pay attention to the design of your packaging and labeling can decrease the visibility and attractiveness of your products, which can be devastating for sales.

Packaging has four distinct marketing functions, according to the book “Essentials of Marketing,” by Charles W. Lamb and colleagues. It contains and protects your product. It promotes your product. It helps consumers use your product -- for example, by allowing them to reseal it between uses. Finally, packaging facilitates recycling and reduces environmental damage.

Your product’s label delivers your sales message. You can explain what benefits you offer that competitors don’t, for example, or promote a prize or discount. You also can develop brand goodwill by showing customers you share their values. For instance, images of happy families, healthy athletes and green pastures each speak to different types of consumers.

Labels also must fulfill your legal obligations. Food manufacturers, for example, must publish detailed nutritional information in a specific format and employ marketing terms -- such as “low-fat” or “reduced cholesterol” -- that conform to federal regulations. Finally, your product might need a UPC, or universal product code, especially if it will be sold in high-volume retail outlets.

A notable logo and color scheme can help differentiate your product from those of your competitors, as can the shape of the product packaging. Bright colors attract attention and draw the customer’s eye -- unless all your competitors have bright packaging and labels. In that case, a subdued design scheme might stand out more. For example, some potato-chip companies use understated designs on gourmet-style products to differentiate themselves from brightly colored, mass-appeal items on the same shelf.

Novel packaging can attract consumers, but practicality is equally important. For example, if your competitors use resealable packaging for their food products, consumers might favor those products over yours simply due to their practical benefits. Inconvenient packaging -- for instance, if the item is huge or hard to open -- also can hurt sales.

When people see your product, they should think of your brand. The packaging and labeling of each item in your product line should match all others so your promotion efforts can coordinate. For example, suppose you promote one type of product with a magazine advertisement. All the other items in your product line will benefit from the exposure if they share similar design characteristics and a recognizable logo.