ROI in Package Design - The best return on investment.
For most consumer goods, packaging design is the most cost-effective marketing tool that increases sales a result. That is, it has the highest ROI - return-on-investment.
This means that for each dollar invested the increase on product sales is proportionally higher than the investment in other marketing actions such as advertising, advertising, promotions, etc.
Let us review these statements through various widely accepted measures.
Let's start effectively: which tool influences sales the most?
A POPAI survey showed that more than 80% of the buying decisions between brands are made at the point of sale. In the same category, the survey showed that impulse purchases at sales shelves are estimated at more than 50%.
On the other hand, a survey carried out by CNI (Brazilian- National Confederation of Industry) showed that 75% of the investments made by companies in design were able to increase their sales by 41% and reduce costs, sales were not affected in any of these cases.
At the point of sale competition is always side by side putting the loyalty of consumers to test by providing a new promise, evoking a new experience. Therefore it is vital for a brand that packaging captures the heart and eyes of the consumer.
In terms of recall, also known as "brand value," cross-category studies show that in open-ended questioning, consumers remember more about packaging than about advertising or brand promotion.
It's possible to calculate this return in monetary terms. This statement comes from the ROI calculation methodologies presented in the book "Measuring Brand Communications ROI" by Don E. Schulz and Jeffrey Walters. The authors have identified a number of brand assessment models that follow traditional accounting practices. One of these models has been applied to a number of different brand identity attributes.
In essence this methodology calculates the flow of brand income according to historical data. It disregards costs that are unrelated to communication (such as product manufacturing, packaging production, distribution, and other fixed costs that are not affected by the change in communication strategies). Based on historical data, it establishes a projection of sales and profits, assuming that no change is made in the communication platform. From there he 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 mainly for the advertising market, but also works when applied to more extensive brand communication platforms measuring isolated variables, such as, for example, the packaging design.
Put another way: packaging design is the most efficient communicator of brand values.
Why does this happen?
This happens because the point of sale is where a battle for perception begins. It is where the consumer is enchanted or not with the presentation of product. Therefore, for 90% of consumer goods, packaging determines its success.
If we look at packaging from a sustainable point of view, we will see that investment in packaging design is much more durable than advertising, promotion or digital marketing. A visual identity and branding system often survive more than three advertising campaigns and more than eight promotions cycles. This is because the packaging is much more permanent within the brand communication platform than any other marketing tool.
In conclusion, when it comes to defining the funds of a marketing plan from launching a new product or repositioning a brand, if you value the design of your packaging you will get higher returns.
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