Market View: Labeling May Be The Most Cost-Effective Way To Communicate With Consumers

Labels are often an underutilized method of communicating with consumers. Market expert John Stanton asks: Why not make your labels more powerful.

By John Stanton, Contributing Editor

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I was looking at a new product label for milk that I bought at a convenience store. It had one major word on the label, MILK. What were the designers thinking when they decided on that label?

Did they think consumers look at the refrigerated section and ask themselves, “What is that white stuff in those one-gallon plastic containers? Oh, it's milk,” they say as they read the label.

Labels seem to be one of the most underutilized methods of communicating with consumers. And the interesting thing is they're probably the least expensive. We have to put a label on our products, so why not make it a powerful label?

If we consider milk, a powerful label acts as a billboard in the store. It can shout out the benefits of that product. Everyone who walks through the store sees the billboard whether or not they buy milk. They see it once or twice a week when shopping. And what a bargain; the incremental cost of putting product benefits and attributes on your label doesn't cost much more than simply putting the name of your product or some pretty picture on it. In my opinion, a persuasive label is a real bargain.

And if consumers buy milk, they see that label, screaming the benefits of your product, every time they open the refrigerator door. You would think the dairy industry would treat that label like gold. But have you looked at milk labels? They basically state fat content and just in case someone doubted the contents inside they say “milk.”

Maybe the milk industry doesn't need to worry about shouting the benefits of milk, maybe they think putting milk mustaches on people is sufficient to generate sales. Unfortunately that's not the case; the milk industry has experienced declining sales for years.

Labels seem to be an underappreciated stepchild of the communication field. My students have never indicated to me that they would like to design labels, they all want to create advertising. In fact, many of the young executives I've met over the years think the same way.

I once worked on the project where we had to investigate the most effective benefits to put on a label. It was a fairly inexpensive project and when I gave the results to the product managers, I found out the labels had already been printed. The research was just a “protect your ass” activity in case something went wrong.

I'm certainly not the first person to point out the value of the label. Pilditch defined packaging as “the silent salesman” as early as 1957. And Lewis expanded Pilditch’s views in 1991, stating that "good packaging is far more than a salesman, it is a flag of recognition and a symbol of values."

In 1977 McDaniel and Baker said, “The label on the packaging provides the manufacturer with the final opportunity to persuade prospective buyers prior to brand selection.” Shoppers, as they pass down the aisles, are “exposed” to packages just as they are to print media or other forms of promotion.

At the university, when we did research on commodity products, we discovered that in most cases almost any claim made on a label is many times better than a label that makes no claim. When we specifically studied milk labels, we found making any claim was four times more powerful in creating attention than the plain label.

So what is a food marketer to do? First, recognize that your product label may be the most influential tool you have in your marketing arsenal. It talks about your product when a person is in the store, with money in their pockets, ready to buy. Not at 9 p.m., while I'm watching TV in the living room.

Do research on benefits! Find out what benefits can be expressed in a few words. For example, in our research on milk labels we found adding the expression "from your local farmer" had a huge impact on both attention and intention to buy.

Do research on labels! I suspect because advertising costs so much to both produce and execute, executives are much more willing to spend money to test their advertising. In many cases, labels get little more than a “once over" by internal marketing people. If you just consider the potential impact a label has, you might be more willing to spend money to make sure you're getting the maximum impact. Label research is not expensive, and by using the latest marketing research/statistical techniques such as discrete choice experiments, it can be done effectively and inexpensively.

Don't let the government get in your way! There are certain things that must be on the label, but they don’t have to dominate the space. I think one of the best examples are the funny labels on Heinz ketchup. The largest print on the label says things like, "Are your French fries lonely?” Ketchup is pure fun, and so is the label. Yes it has “ketchup” on the label as well as the company name, but it shouts fun.

Packaging and labeling may be the most cost-effective way to communicate with consumers. Imagine that your label was the only way you could tell consumers what you are offering. Treat it as preciously as it deserves.

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