Brand and deliver
Researchers at the Universidad Autónoma de Madrid, Spain, have been investigating how consumers respond to branded packaging.
According to José Luis Méndez from the university’s Department of Finance and Marketing Research, when it comes to packaging there is no one formula that will make a person buy a product.
In a paper entitled, The Relative Importance of Brand Packaging, Price and Taste in Affecting Brand Preferences, Méndez explains the ‘relative importance’ of branding means people generally avoid brands that they perceive a risk in. ‘The greater the prestige of a brand, the greater the feeling of security that the consumer has that the product will function properly,’ he says.
After conducting an investigation using conjoint analysis, a technique that measures preferences for a combination of attributes, Méndez found that consumers often opt for big brand names when faced with making a decision on a high-price product without the necessary information. Brand name, and therefore price, becomes a fall-back indicator of quality on items such as electronic goods and cosmetics.
Conversely, with food and drink products, researchers found that consumers are more willing to use a trial and error method based on extrinsic values, such as pack design and price, as the loss margin is small.
The human brain can only process so much information at once, so when we enter a supermarket, it is the extrinsic cues that draw us in and make us consider buying a product, says Méndez. ‘Extrinsic cues are more effective because consumers can more easily compare brands. They allow a product to be perceived differently from the rest. Coca- Cola, for example, has been investing in its brands for almost a century and is now a differentiated product with a competitive advantage over its rivals.’
The team also found the effectiveness of a brand name varied across product categories. ‘For cola beverages, brand packaging is more important in preference formation than taste, while in the olive foods category, price was the most important attribute,’ says Méndez. He puts this down to a form of ‘social consumption’.
‘In the case of Coca-Cola, this can be seen in examples such as young people having a party who are embarrassed to have a bottle of independent labelled cola. However, when it comes to olives, they are put on plates, not in the container and therefore the consumer can not detect which brand has been used.’
Although big brands still hold sway in many areas, supermarket own-brands are catching up fast. The key to their rise, says Méndez, is effective use of packaging, with own-brands increasingly more in tune with functionality while a big brand may focus on aesthetics.
He gave the example of the Spanish ‘Mercadona’ supermarket, that has some own brand items consumers rated as ‘excellent’. Out of 650 shoppers surveyed there, Méndez found that for 37% of consumers, the store’s own brands were their brand of choice. ‘This preference is solely due to the quality of the brand. In addition, Mercadona does not advertise its brands, this is from word-of-mouth.’
On the closing gap between own and big brands, Méndez adds, ‘Retailers are learning to give value to their own brands with better packaging, improved designs, better location on the shelf and competitive pricing. They have also learned that if they work with exclusive suppliers, they can demand better quality and logistics to get good products at the best price.’