Do structure improvements translate to a positive return on investment? The answer is a qualified yes, according to a new consumer study of packaging innovation conducted by Perception Research Service (PRS) and the Institute of Packaging Professionals(IoPP).
Across the range of product categories studied, the most consistent finding was that packaging innovation could significantly impact shoppers’ price expectations and purchase decisions. In more than half the cases, new packages drove increases of 20 cents or more in anticipated product pricing.
The study also found that innovative packages dramatically impacted shoppers’ brand selections (with packaging and pricing in view) in more than half the categories studied. However, the study also demonstrated that “the power of packaging” could work both ways. In cases, innovative packages significantly detracted from shopper preference. Clearly, success is packaging innovating as an end in itself.
By speaking with shoppers about specific packages and functional benefits, the study provided insight centered two primary questions:
1. Which packaging innovations are most likely to make a different?
2. How dose packaging innovation link to decision making?
To address the first objective, PRS and IoPP asked shoppers about packaging features and benefits that are more important to them within the eight product categories studied. Some trends emerged:
· In food-related categories (such as sugar, raisins and potato chips), product protection and tamper resistance consistently ranked as top priorities. These were typically cited as “extremely important” by more than 75% of survey respondents.
· In non-food categories, product protection was typically secondary to ease of opening and dispensing.
On a broader level, the survey results show that asking shoppers “What matters to you?” is probably less valuable than identifying unmet functional needs within specific product categories.
The study demonstrates that innovative packaging systems can directly impact shoppers’ price expectations and product selection. Thus, if innovation is done properly, it is very likely to provide a properly, it is very likely to provide a positive return on investment (ROI) through increased market share or the ability to raise prices to cover incremental costs.
The most significant example of the positive impact of innovation is in the sugar category. An analysis of information from respondents indicates that the new packaging structure for the Domino brand addresses an unmet category need for a recloseable package. It also yields the following results:
· Despite a smaller size, the new Domino package drove a significantly higher price expectation ($3.38) than that for the former packaging ($2.96). While Domino had actually lowered pricing by 10 cents when introducing the new package (due to the smaller size ), this finding suggested that Domino could have actually raised prices—and been very likely to pass along the costs of the new structure without compromising sales.
· When respondents were faced with actual retail pricing and asked to choose between the new Domino package and a lower-priced, store- brand competitor’s package , packaging structure impacted the purchase decision significantly. Domino went from being selected 55% of the time in the former package to being the choice among 74% of respondents in the new package.
Read more about the study results. To purchase this study, contact Young at syoung@prsresearch.com or 201/346-1600.
- By Scott Young, President Perception Research Services
