PACKAGING DESIGN, BRANDING AND COMMUNICATION AGENCY

ROI in Package Design

ROI in Package Design

ROI in Packaging Design The best return on investment.

For most consumer goods, packaging design is the marketing tool with the highest sales efficiency and the best cost-benefit ratio. In other words, it has the highest ROI – return-on-investment.

This means that for every dollar invested, the effect on increasing product sales is proportionally greater than the investment in other marketing actions. Actions such as advertising, publicity, promotions, etc.

Let’s analyze these statements using several widely accepted measures.

Let’s start with effectiveness: which tool has the greatest influence on sales?

Research by POPAI has shown that more than 80% of purchasing decisions between brands are made at the point of sale. In the same category, the research showed that impulse purchases on the shelf are calculated at more than 50%.

On the other hand, a survey carried out by the CNI (National Confederation of Industry) showed that of the investments companies make in design, 75% have managed to increase their sales, 41% have reduced their costs and in no case has there been a drop in sales.

At the point of sale, the competition is always side by side, pulling on your consumer’s loyalty, providing a new promise, evoking a new experience. It is therefore vitally important that your packaging captures the consumer’s heart as well as their eyes.

In terms of recall, also known as “brand value”, cross-category studies show that in open-ended question tests, consumers remember more about packaging than about advertising or brand promotions.

Now this return can also be calculated in monetary terms. This is based on the ROI calculation methodologies presented in the book “Measuring Brand Communications ROI” by Don E. Schulz and Jeffrey Walters. The authors identified a number of brand valuation models that follow traditional accounting practices. One of these models was applied to a series of different brand identity attributes.

In essence, the methodology calculates the brand’s income stream according to historical data. It disregards costs that are not related to communication (such as product manufacturing, packaging production, distribution and other fixed costs that are not affected by changes in communication strategies). Based on historical data, it establishes a projection of sales and profits, assuming that no changes are made to the communication platform. It then uses the same measurements based on the implementation of the new communication program. It measures market share and profit growth against the total costs of the investment made.

This methodology was created primarily for the advertising market, but it also works when applied to broader brand communication platforms by measuring isolated variables, such as packaging design.

In other words: packaging design is the most efficient communicator of brand values.

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Why is this?

Because the point of sale is where the battle for perception takes place. It’s where the consumer is enchanted or not by the presentation of the product. That’s why, for 90% of consumer goods, packaging determines their success.

If we look at packaging from another point of view, sustainability, we will see that investment in packaging design is much more lasting than advertising, promotions or digital marketing. A packaging and brand identity system often survives more than three advertising campaigns and more than eight promotion cycles. This is because packaging is much more permanent within the brand’s communication platform than any other marketing tool.

Conclusion: when defining the budget for a marketing plan, launching a new product or repositioning a brand, value the design of your packaging and obtain greater returns.

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