Introduction
How do you identify a specific product or service? Of course from the label printed on the good or displayed by the service we get to know the brand, what product it is, how to use it, its expiry date and other such important information.
Imagine what if the products and services were not labelled? They would all probably look identical. Then, how would the respective brands get recognition? So, the process of labelling is now an important element of marketing. Want to know further? Let us dive straight into the discussion.
Meaning of Labelling
Labelling can be defined as a process of display of all the information on the packaging material or on the product itself. While labelling the product a company has to follow all the guidelines and adhere to all the legal requirements like ingredients, nutritional and safety information mentioned under the Competition and Consumer Act 2010. The details mentioned in the labelling of the product help the customer in knowing a product better and help them decide whether to buy it or not. There are three types of labels.
Brand Label: This provides necessary information about the product.
Descriptive Label: This provides detail regarding the product usage.
Grade Label: This part of labelling specifies the aspect and features of the product.
To recognize certain brands and products we use labelling, this is due to the specific labelling, that their logo and design is well known to us. A distinct label of a product is one of its most identifiable features in the product, and thus after viewing it the customers gain the confidence to buy the product.
Labelling is thus an important part of the branding of the product and the company uses it to fulfil their motive of mass selling. It helps the product to stand out in the market, and this identifies it as a part of a particular brand. This is an important era of high and intense competition and thus labelling serves the purpose.
Labelling in Market
Branding is a big part while labelling is a part of it, which enables the process of product identification. This is printed information that is bonded to the product for recognition and also provides detailed information and basics about the product. Customers make the decision whether to buy it or not easily at the point of purchase seeing the labelled on the product.
Also, it should be noted that the labels must comply with the legal obligations. A company’s label should adhere to the Competition and Consumer Act 2010. According to The Food and Drug Administration (FDA), the products are to be packaged and processed, also the food items must have nutritional labelling. The Federal Trade Commission Act (FTC) states that fraud with labels and graphics is an offence and also this consists of unjust competition. The Fair Packaging and Labelling Act levies the compulsory labelling conditions and boosts independent packaging standards which grant federal companies to establish packaging regulations in certain industries and businesses.
Importance of Labelling
Labelling is significant as it pulls customers’ attention to purchase the product because of its visual appeal. This also promotes the sale of the product as this initiates the sale of the product. Labelling this is an important factor that helps in selling the product, labelling also helps in grading the products, and this provides information required by the law.
Labelling is one of the important aspects of the marketing of a product. Labelling is very important as it helps in attracting the customer. It can be strategically combined with packaging and can be used by marketers to encourage potential buyers to purchase a particular product. Packaging is also used for relaying information to the customers. Packages and labels give detail on how to use, transport, recycle or dispose of the package or product to the customers.
Labelling serves as an identity for the product. Labelling is also a very important tool to exaggerate the product. It differentiates a certain product from others on the shelves of the supermarket. A person can find out about the constituents of a product. This helps in spreading awareness among the customers about the item they are using as it also provides various other details about the product.
Branding Packaging and Labelling
Branding is the process of attaching meaning to a specific organisation, company, product or service by creating and shaping a brand in the consumers’ minds. This is a strategy designed by the organisations to help the people to quickly identify and experience their brand, and also give them a reason to choose their products over the competition’s or rival’s product.
Packaging is the art of enclosing or protecting the products for distribution, storing, sale, and use of the product for further use. Packaging also means the process involved in designing, evaluating, and producing the packages.
Labelling is defined as the process of affixing a descriptive word or phrase to someone or something. An example of labelling is the process of putting signs on jars that say what is inside them.
Role of Labelling
Labelling is the only way by which a customer can know what is inside a bottle (product). Hence it must relay the correct information about the product. This becomes even more important for sectors like the Pharmaceutical industry which manufactures medicine. Labelling should also contain information about harmful chemicals present inside a product or commodity, especially if it is a product that is meant for children. The role of labelling becomes essential in the case of edible products. The label of an edible product must contain information like manufacturing date and expiry date, in some cases, details like “use before” must be mentioned on the product so that the customers do not have to suffer the consequences of using a product that has reached its expiry date. The price of a product must also be mentioned clearly on a product so that the customers may know the actual price and avoid getting conned.
What Needs to be on a Product Label?
A product label usually holds this certain key information in its label:
The name of the product that affixes the label.
A logo of the brand, if the product is part of a line of the brand.
Units of measurement denote the size, quantity or weight of the specific item.
A short description or tagline encourages the customers to buy the product.
The list of ingredients.
The history is attached with the product.
Directions for use of the product.
The label should be readable enough, the type should be legible in its own font size and colour. A font size that is readable by others should be used in the labelling.
Differentiate Between Labels and Brands
A label is a piece of paper, a plastic film, or a cloth, a metal, or other material which is affixed to a container or product, on which it is written or printed the information or symbols about the particular product or item. Information is directly printed on a container or on an article that can also be considered as labelling.
A brand is the overall experience of a customer which distinguishes an organisation or product from its rivals in the eyes of the customer. Brands are used in business, marketing, and advertising. Name brands are also sometimes distinguished from generic or store brands.
FAQs on Labelling: Purpose and Importance in Marketing
1. What is labelling in the context of marketing?
In marketing, labelling refers to the process of attaching a slip or tag to a product's packaging that displays information about it. This label can be a simple tag attached to the product or an intricately designed graphic that is part of the package itself. It serves as a primary tool for identifying the product, communicating its features, and persuading consumers.
2. What are the main functions of labelling for a product?
Labelling performs several crucial functions that are essential for both the company and the consumer. The primary functions include:
- Product Identification: It helps customers easily identify a product from a range of similar items on the shelf.
- Description and Specification: It provides detailed information about the product's contents, ingredients, usage instructions, and features.
- Grading of Products: Labels allow marketers to categorise products into different quality grades, for example, 'Grade A' or 'Grade B', which helps in setting different prices.
- Promotion: An attractive and well-designed label can grab customer attention and act as a silent salesman, encouraging purchase.
- Legal Compliance: It provides information that is required by law, such as the Maximum Retail Price (MRP), manufacturing date, and statutory warnings.
3. How is labelling different from packaging?
While closely related, labelling and packaging are distinct concepts. Packaging is the design and creation of the container or wrapper for a product, focusing on protection, storage, and handling. In contrast, labelling is the act of providing written or graphic information on the package. Essentially, packaging is the 'body' that holds the product, while the label is the 'voice' that communicates information about it.
4. What are the different types of labels used on products?
Based on the information they convey, labels can be classified into three main types:
- Brand Label: This type of label only contains the brand name or logo of the product (e.g., the Nike 'swoosh' on a shoe). It is primarily used for brand identification and promotion.
- Grade Label: This label indicates the quality or grade of the product through a letter, number, or symbol (e.g., 'Grade A' rice, '4-star' rating on an appliance).
- Descriptive Label: This is the most comprehensive type, providing detailed information about the product's features, ingredients, net weight, usage instructions, and safety warnings.
5. Why is labelling considered a crucial element of the marketing mix?
Labelling is a crucial part of the 'Product' component of the marketing mix. Its importance stems from its role as the first point of contact between the consumer and the product on a shelf. It directly influences a consumer's perception of quality, trustworthiness, and value. A strong label can differentiate a product from its competitors, justify its price point, and build brand loyalty by communicating effectively with the target audience.
6. How does effective labelling help a brand compete in the market?
In a competitive market, effective labelling acts as a key differentiator. A unique and memorable label helps a product stand out on crowded retail shelves, enhancing brand recall. By clearly highlighting unique selling propositions (USPs), benefits, or quality certifications, a label can persuade a customer to choose it over a rival product. It builds trust by providing transparent information, which is a powerful tool for retaining customers.
7. What statutory warnings or legal information must be included on labels as per Indian regulations?
As per Indian laws like the Legal Metrology (Packaged Commodities) Rules, 2011, and guidelines from authorities like FSSAI (for food products), certain information is mandatory on labels. This includes:
- Maximum Retail Price (MRP)
- Name and address of the manufacturer
- Net quantity or weight
- Date of manufacturing and date of expiry
- List of ingredients
- Specific statutory warnings for products like tobacco or alcohol.
8. Can you provide some examples of how labelling influences consumer buying decisions?
Certainly. A health-conscious consumer might choose a food product with a label that prominently displays 'No Added Sugar' and provides a detailed nutritional facts table. Similarly, a green dot or red dot on food packaging instantly informs a consumer about whether the product is vegetarian or non-vegetarian, directly impacting their choice. An 'ISI mark' or 'FSSAI-approved' logo on a label can build trust and persuade a risk-averse consumer to buy the product.
9. How do labelling and packaging work together to communicate a brand's message?
Labelling and packaging work in synergy to create a cohesive brand experience. The packaging provides the physical form, texture, and colour palette (e.g., using recycled cardboard for an eco-friendly brand). The labelling then adds the specific details that reinforce this message, such as using earthy fonts, a '100% Recycled' symbol, and the brand's story. Together, they communicate the brand's values and promise to the consumer before the product is even used.
10. Is it possible for a label to be misleading? What are the consequences?
Yes, it is possible for a label to be misleading through false claims, ambiguous terms like 'natural flavouring' without clarification, or hiding information in fine print. This is an unethical practice and is illegal under the Consumer Protection Act. The consequences for a company can be severe, including heavy fines, product recalls, legal action from consumers, and a significant loss of brand reputation and customer trust, which can be very difficult to regain.
