The effect of innovative package designs on the success of Fast Moving Consumer Goods

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The effect of innovative package designs on the

success of Fast Moving Consumer Goods

A case study of the Dutch chewing gum sector

Master Thesis MBA Strategy & Innovation

By Miryam de With

S1542095

University University of Groningen / Faculty of Economics & Business Study program MSc – Business Administration: Strategy and Innovation First Supervisor P.M.M. de Faria

Second supervisor T.L.J. Broekhuizen

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Abstract

The Fast Moving Consumer Goods industry is characterized by a fast pace of new product introductions, many of which fail in the competitive landscape of grocery stores. One way to attract the attention from consumers is by packaging. This research aims to indicate the success of different types of innovations. To what extent does packaging influence the success of an innovation? Four different types of introductions were found, based on the innovativeness of their product and package; innovations with a low innovativeness for both dimensions (me-too innovations), product innovations, packaging innovations and a combination of both, or ‘concept innovations’. The success of product introductions between 2005 and 2010 of the three major brands in the Dutch chewing gum market were researched. It is investigated if one of these categories of innovations is found to be more successful than others. Hence, by doing this, it can be researched if the innovativeness of either the package or the product have a clear relation to success. After combining the success of the innovations with the innovativeness of the two dimensions, it was found that mere packaging innovations are the least successful of the four categories, with a success rate of 25%. The highest chance of success was found for combined product and packaging innovations; these have a success rate of 50% in this study. A small interaction effect was found; innovative product introductions can best be combined with an innovative package to increase chance of success.

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Preface

The research focus on the success of Fast Moving Consumer Good innovations is mostly inspired by my own change of perception after doing my internship for a Dutch FMCG company. More specifically, for a well-known Dutch chewing gum brand: Sportlife. This is one of the three largest chewing gum brands in the Netherlands, and thus included among the three brands discussed in this research. Nowadays, the chewing gum market is dynamic, with a recent burst of competition and innovations. I personally used to look upon gum – and other FMCG products - as a product I bought without consciously thinking about it. Research confirms the accuracy of this perception by labeling chewing gum as an ‘impulse product’, a product that is bought by most consumers without giving much thought to it. Hence, prices of products are low and the product is only meant for a short-term use.

When you start working for a chewing gum brand, and you are forced to actively investigate the market, you consciously think about the amount of innovations that enter the market each year. This inspired me to research the innovations in the FMCG market. More specifically, it made me question the importance of packaging in FMCG in general. In the Fast Moving Consumer Goods industry, products are sold that are not meant to last a lifetime. On the contrary, they are manufactured for a single use, or only few usage moments only. Hence, it could by hypothesized that packaging can prove to be crucial at point of sale, since consumers only give limited attention to their purchase before entering the grocery store. Therefore, in this research, it is investigated to what extent packaging makes a difference for the success of innovations in this impulse category.

I would like to thank everyone that assisted me in any way while I was conducting this research. First of all, my supervisors Mr. Pedro de Faria and Mr. Thijs Broekhuizen, who provided me with clear feedback, and advice for improvements. Also, I would like to thank my former supervisor Anique van Eeuwijk from LEAF Holland, who was available as an expert on the industry for validation of this research.

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1. Introduction

1.1. Topic

All consumers are familiar with them, but only few might realized it; out of the box packages that stand out from the crowd. Food product brands use a range of packaging attributes such as colors, designs and shapes to attract the attention from consumers. Packaging today is no longer just about wrapping a product and protecting it. The importance of packaging design and the use of packaging as a vehicle for communication and branding are growing in a field of increased competition. Packaging today has taken a role similar to other marketing communications elements; it has thus become one of the most important marketing tools in today’s competitive environment. Packaging becomes an added value for products; it is a means to differentiate from competitors (Silayoi et al., 2007; Simms, 2010; Candi, 2010).

In several industries, new products are very similar in functional features, but companies compete on their unique design. These design-driven companies are often found in technological industries; for example Apple or Bang & Olufsen. In these industries, design is a mean to differentiate, and can thus be seen as a factor of product innovativeness (Talke et al., 2009). However, most of the studies concerning the influence of product design on the success of an innovation are researching durable products. It is interesting to find out if the same applies to the FMCG (Fast Moving Consumer Goods) industry, an industry characterized by low-priced items that are only used for a single or limited number of consumptions (Baron et al., 1991).

Packages can stand out thanks to their shape, color, materials or way of communicating with the consumer. The usage of a package design that differs drastically from existing designs in the market is risky; consumers are conservative and need time to get used to a new packaging form. Consumers get attached to a standard package. Moreover, it can be argued that some companies successfully used a package design to establish ease of recognizability and create a design that is recognizable for consumers even if there would be no branding present at all. Examples given in literature and case studies are the Maggi bottles, Heinz ketchup bottles and the purple Andrelon shampoo bottles1.

However, several examples can be found of FMCG products with a package that was unique to the category and caught the attention of consumers on the shelves of supermarkets.

First of all, Unox, a Dutch brand belonging to the FMCG-company Unilever, was successful in the soup segment. Soup used to be sold in cans, but Unox introduced soup in a bag in 2005. This was a risk, but it paid off. After introducing a bag for two people, a family bag was introduced, which also proved to be a sustainable success. It was among the best long term

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performing innovations introduced in 20052 3. Figure 1 below shows the conventional and new packaging format.

Figure 1. The conventional soup in a can (left) and the packaging innovation on the right; soup in a bag. As can be seen, both products are from the same brand (Unox).

Fred & Ed sandwich spread is another example of the use an out of the box design. Conventionally, these products such as peanut butter and jam were packed in a glass jar. The new tubes are more hygienic, attract attention on the shelves, are playful for children and have a design with cartoons to appeal to the younger segment. Figure 2 shows a picture of each. After the original introduction, many other sandwich spreads followed, such as cheese.

Figure 2. The conventional packaging format of sandwich spreads was a jar (left), Fred & Ed innovated with the same product in a tube.

In the nonfood sector, paint is a product that used to be put in cans only. It was the dominant packaging form for over 125 years when Histor introduced paint in a revolutionary paint can that is easy to open and makes it easy to poor the paint4. It is made of plastic, which was quite the revolution and caused Histor to win many design awards. Whether it is a sustainable success when it comes to turnover, cannot be determined yet, since the product was

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The product was mentioned in the Distrifood Stayers top 20, which indicates the 20 best performing products two years after introduction, thus measuring the long term success

3 http://www.distrifood.nl/web/Assortiment/Assortimentsnieuws/Assortiment-artikel/138060/Stayers-2007-retail-aarzelt.htm

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introduced in 2009. Figure 3 shows this innovation, together with the conventional paint in a can.

Figure 3. Paint in the traditional can (left) and in the new paint can invented by Histor (right), made of plastic.

Pringles has been successful in altering the packaging form of potato chips: from a bag to a can, which proved to be a sustainable success (figure 4). Toblerone is another brand that uses package form to stand out from the crowd; its triangular shaped package is unique on the shelves for chocolate products (figure 5).

Figure 4. Crisp chips were usually known in bags (left), but Pringles introduced them in a tube (right).

Figure 5. A conventional chocolate bar (left) and the triangular shaped bar of Toblerone (right).

At a time when producers try to make their packages stand out as much as possible, Innocent Drinks caught the attention of consumers thanks to the simplicity of its packaging5; the packaging was pure and neutral, made of recycled products. It should be noted that this was in line with their brand image, which promotes ‘purity’ (figure 6).

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Figure 6. Fruit juice packs usually try to attract the attention by adding branding, flavor, bright colors and images of fruits. Innocent Drinks has been able to attract the attention from consumers by its back-to-basic, ‘pure’ package.

All these cases show that packaging has indeed made a difference for some producers; the products themselves were not changed; the sandwich spread was still the same, just like the paint and soup. However, additional sales were generated thanks to the altering of the standard package. The question rises to what extent product design can make or break a product. FMCG products are non-durables; products that will not last for long and are not meant for this purpose. On the one hand, it is vital to attract the attention from consumers with a striking design or package, but on the other hand it is a product that will be thrown away after use. Moreover, consumers are hesitant to change, thus drastically altering the package format can confuse consumers (Rogers, 2003).

1.2. Relevance

Looking at packaging as a success factor of innovations is interesting, since the secret to consumer acceptance of an innovation could be of great help to manufacturers. If it is known what type of innovation is most likely to succeed, R&D can be aimed towards developing these types of innovations. Success factors of innovations and the adoption of new products by consumers are often studied, but the relation between packaging and success in FMCG is seldom analyzed (Rogers, 2003; Talke et al., 2009). This research will look at this relation by comparing the success of innovations to their degree of innovativeness.

While most companies strive to bring innovative food products to market, the reality is that the majority of new introductions are of the "me-too" type. The result is a new product failure rate of approximately 60% to 80% (Goldman, 2005). Goldman (2005) also mentions an study in which it was found that consumers are disappointed by the lack of new product innovation in food and beverages. Therefore, he concludes that food and drinks manufactures should invest in truly innovative products. It is thus argued that innovativeness of a new product should be high in order to be successful.

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supermarket visit is 18 minutes, which means time for each product statistically is 0.06 seconds. To get the attention, it is necessary to stand out (Reflex Publishers, 2010). Further on in this research, more reasons for the importance of packaging will be discussed (chapter 2).

1.3. Introduction to the case study

The relation between packaging and innovation success is thus interesting to investigate. This will be done by means of a case study. The case study will be done with FMCG products, more specifically, with chewing gum products. The market for gum confectionery includes “any flavored gum which is chewed but not swallowed”. This includes both sugared and sugar-free gum, as well as medicated gum with dental or breath-freshening benefits (Datamonitor, 2008). The chewing gum market was chosen for several reasons.

First of all, due to the fast introduction of new innovations, private labels hardly play a part6. The consequence of this is that prices and distribution (availability) of products are relatively equal which makes it easier to compare the products. Hence, private label products are mostly imitations of existing products in the market, sold for a lower price (Finch, 1996).

Next, chewing gum is often seen as an impulse category; many people choose their chewing gum without consciously thinking about the purchase7. This makes packaging an important aspect that can convince consumers to choose for a certain product.

Finally, the market is innovative because innovations are needed to keep the category active and increase sales8. The key to growth in the chewing gum industry is often said to be innovation. Chewing gum manufacturers worldwide are experimenting with different flavors and variety in chewing gums to attract more consumers9. Constant newness has been driving the category.

This research will focus specifically on the Dutch chewing gum market. Many products introduced in the Netherlands have also been introduced in other countries, since many players operate internationally. This is the case for the brand Mentos, owned by Perfetti van Melle, and Stimorol, owned by Kraft Foods. Sportlife is the only brand that is included in this case study that is operating locally (in the Netherlands and Belgium). In chapter 4 an introduction to the industry is provided for more background information.

For years, the ‘blister’, introduced by the brand Sportlife was the dominant package used and the most popular one. Mentos introduced gum in a jar in 2006, which boosted the chewing

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http://www.distrifood.nl/web/Assortimentsdossier-artikel/126337/Huismerk-rukt-op-in-snoepschap.htm 7

http://www.levensmiddelenkrant.nl/25/bekende-impulscategorien-scoren-ook-zonder-promo 8_{Constant Newness Makes Gum Sales Pop (Drug store news February 2011)}

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gum category10. The most recent package innovations include gum in an envelope-case, and the introduction of a plastic squeeze pack; Sportlife Vibes. These are all packaging innovations, visible in figure 7.

Figure 7. Top left: an envelope case (Mentos Aqua Kiss), top right: a blister (Mentos gum), middle right: squeeze pack (Sportlife Vibes), bottom right: pack (Bubblicious bubble gum), bottom left: jar (Mentos White) and middle: bag (Albert Heijn private label).

This research will dig deeper into the innovations that have taken place in the past five years, including the reason behind their introduction. This is interesting, because next to the packaging innovations mentioned before, also many product innovations have been introduced. To see if there is a relation between packaging and success of an innovation, this research will compare these cases.

1.4. Problem statement

Following the introduction to the case above, a research question has been formulated. This research will attempt to find a relation between the success of a new product introduction in the chewing gum industry, and its packaging innovativeness. The question has been formulated as follows; ‘What is the influence of innovative packaging designs on the success

of Fast Moving Consumer Good innovations?’

This main research question has been divided in several sub-questions to be able to come to a conclusion;

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• What types of innovations exist in the Dutch chewing gum industry and how can these

innovations be categorized when looking at innovativeness?

• What are the drivers of success for innovations in the Dutch chewing gum industry,

as perceived by consumers?

• Which innovations in the Dutch chewing gum market have been successful in the past

5 years?

• Is a relation visible between the innovativeness of the package and the success of the

innovation?

This research paper will continue with a theoretical framework (chapter 2), where the existing theory in this field will be reviewed. Information will be provided on the FMCG industry; innovations and the importance hereof; factors influencing the diffusion of an innovation by consumers; factors that can influence the success of an innovation in the eyes of the consumer; and the importance of packaging. After assessing these topics, a conceptual framework can be formulated that will be used for analysis of the cases.

After reviewing the existing literature on the topic of packaging innovations, the

methodology (chapter 3) will be assessed. Here, the data collection, selection and analysis

will be explained. The scope of the research will be explained, together with the way the cases will be analyzed.

After the explanation of methods used, the results (chapter 4) are presented. This is kicked off by an introduction to the chewing gum industry, for essential background information. Consequently, all cases will be presented. A summary of most important findings is included in this report, additional information and sources can be found in the Appendix. Next, product and packaging will be discussed, as these are the most important drivers for innovativeness in this research. After this section, the different types and trends in innovations that were found will be discussed. To be able to draw a valid conclusion, it is necessary to hereafter discuss the success of each case; has the product introduction been a (long term) success? Next, the control variables and dimensions that influence speed of diffusion by consumers will be discussed. To conclude, results are presented, including the explanation of the relation between packaging and product innovativeness and the success of innovations.

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2. Theoretical framework

2.1. The Fast Moving Consumer Goods Industry

The Fast Moving Consumer Goods industry, also called the Consumer Packaged industry11, can be defined as “an industry with low-priced items that are used for a single or limited number of consumptions” (Baron et al., 1991). These products are thus the opposite of durable products. Characteristics of FMCG products for consumers are the low price, low involvement (there is little or no effort put into the choice of an item, except for products with strong brand loyalty) and frequent purchases (Majumdar, 2004). These products are therefore also called impulse products. Impulse purchases are “unplanned, decided on the spot, stem from reaction to a stimulus and involve a cognitive reaction, an emotional reaction, or both” (Harmancioglu et al., 2009). Researches in the past have often focused on the existence of impulse products (Clover, 1950; Stern, 1962; Rook, 1987; Gardner et al., 1988; Peck et al., 2006; Harmancioglu et al., 2009). Most of these articles focus on the psychological aspect of impulse buying, and the question whether impulse buying is regarded as good or bad by consumers. Studies suggest that the amount of attention given to nondurable goods is limited; the median purchase time taken for groceries was researched to be 8.5 seconds (Schoormans, 1997). It is therefore important to attract the attention from consumers that are overwhelmed by the large amount of products on the shelves and gain recognition through product design and packaging.

2.2. Innovation as a strategic key

There is a large amount of literature discussing innovations, but the FMCG industry is seldom analyzed (Francis, 2006). This is however an interesting industry when looking at innovative behavior. Innovations have been defined in many ways, but in this paper it is defined as “something new with an added value” (Jacobs, 2007).

In food and drinks, several types of innovations can be distinguished: truly new products, line extensions, reformulations and new packaging (GNPD Mintel). Line extensions are “new secondary characteristics added to an existing product, such as flavor, size or form” (GNPD Mintel). Companies in food and drinks mainly focus on variations to flavor and package size or format, to boost consumer interest, appeal to more experiential consumers and encourage brand loyalty.

A dimension to categorize innovations is incremental versus radical, which refers to the degree of novelty of a product (Tidd et al., 2005). Incremental innovation entails “Doing more of the same things you have been doing with somewhat better results” (Drucker, 1964). This is the opposite of radical innovations, which are breakthrough innovations. Over 60% of

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FMCG introductions are new varieties or range extensions. It is estimated that around 80% of all introductions in the food and drinks category globally are merely innovative or new in one aspect, such as flavor, fragrance or package size. Very few products are truly innovative (GNPD Mintel). A research in the UK revealed that incremental innovations form 98% of the development projects in the industry (Francis, 2006). The same research indicated that, based on a sample of over 7,500 new products in the UK (food and non-food items), nearly 82% of new products in the FMCG industry were of the me-too type. A me-too innovation is “an imitation of an existing product in the market” (Francis, 2006). Thus, innovations can be classified by their innovativeness: how new is the innovation compared to products that were already on the market at the time of introduction? (Talke et al., 2009)

About half of the me-too innovations on the market are retailer private label products in the FMCG industry. If producers launch a new type of product or package, retailers are often tempted to copy this product and sell for a lower price, in order to benefit from its success. These retailer-initiated products are called ‘private label’ products. Goldman (2005) argues that the degree of innovation, or the innovativeness of a product, is usually a good measure of how profitable a product will be. This author states that products should be truly new, in stead of merely an imitation of an existing product in the market. This statement of Goldman brings us to the first hypothesis that will be stated in this research; the higher the innovativeness of a

product, the bigger the chance of success. After conducing the case study, it will be assessed if this hypothesis can be supported or rejected for this research.

2.3. Diffusion of innovation

The greatest unknown in developing any innovation is consumer demand. The prediction of consumer demand is crucial, since new product development is costly and risks are high. However, consumer needs remain uncertain. Hence, to understand how consumers react to new products could greatly reduce the risk of NPD (Harmancioglu et al., 2009; Milotic, 2006). This makes it all the more essential for marketers to have a clear understanding of the drivers of consumer choice in relation to particular products (Milotic, 2006). A number of characteristics have been found to affect diffusion – or adoption - of innovations (Rogers, 2003);

• Relative advantage; the degree to which an innovation is perceived as better than the product it supersedes, or competing products. It is typically measured in narrow economic terms, for example, cost of financial payback, but non-economic factors such as convenience, satisfaction and social prestige may be equally important. • Compatibility; the degree to which an innovation is perceived to be consistent with

the existing values, experience and needs of potential adopters.

• Complexity; the degree to which an innovation is perceived as being difficult to understand or use.

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• Observability; the degree to which the results of an innovation are visible to others. The easier it is for others to see the benefits of an innovation, the more likely it will be adopted.

Whether an innovation will be adopted by consumers, and the speed hereof, thus depend on the five factors mentioned above. Steenkamp and Gielens (2003) found a U-shaped relation between product newness and the trial rate for FMCG products. This U-shaped relation can be explained in terms of two underlying factors mentioned in Rogers’ model: complexity and relative advantage. These factors are argued to both increase with newness, though not in a linear relation. The more novel the product is, the greater its relative advantage in comparison with existing products generally will be (Gatignon, 1997), which should have a positive effect on consumer acceptance. On the other hand, more novel products are also likely to be more complex, which is claimed to reduce consumer acceptance (Rogers, 1995; Gielens et al., 2007). Steenkamp and Gielens (2003) thus argue that products with a low relative advantage can be adopted by consumers because of its low complexity, and that products with a high complexity will only be adopted if there is a clear relative advantage. Their results can be found in figure 8.

Figure 8. The relation between novelty of an innovation and the probability consumers will try the product. Adapted from Steenkamp and Gielens (2003).

Trial Probability

Radical novelty of new product Trivial novelty of new product

Complexity is low Relative advantage is

low

Examples:

New yoghurt flavor New easy to store

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The relation of products with a high innovativeness having a bigger chance of success was already proposed in the section on innovations (hypothesis 1). However, the other relation described by Steenkamp and Gielens (2003) provides us with the second hypothesis;

Innovations with a low innovativeness of both product and package (low complexity/low relative advantage) will have a high speed of adoption by consumers. This relation will also be investigated in this case study.

It can be argued that the diffusion of an innovation is essential for a new product to be successful. The success of a product thus depends on the diffusion by consumers; all elements of a product have to positively influence adoption. This means that relative advantage should be high; the innovation needs to have an added value. The relation to complexity is negative: the higher the complexity, the lower the chance of diffusion for the new product introduction. The relation between the other three factors and diffusion is positive; the higher compatibility, trialability and observability; the faster the adoption of the innovation (Rogers, 2003).

The next section will discuss the factors that influence the success of an innovation in the eyes of a consumer. Hence, these are elements that together make up the innovation as seen by the consumer on the shelves.

2.4. Success factors of an innovation

The success of an innovation is often discussed in literature, and can be argued to depend on many factors, both internal and external to the company. Some scholars focus on the internal characteristics of the company, others on the market the product is introduced into. For example, Nijssen (1999) names several factors that influence the success of a line extension. Some are market related; the intensity of competition, retailer’s buying power and variety seeking behavior by consumers. The other factors discussed in this research are related to the company; the advertising expenditure for the specific product introduction, the overall marketing budget, the number of previous line extensions, the fit between the extension and the parent brand, order of entry in the extension (is it an imitation or is it truly innovative) and the strength of the parent brand. In conclusion, many factors can be taken into account when looking at the success of an innovation.

In this research, the focus is on aspects of the innovation that influence the adoption of the product by consumers. The marketing of a product is affected by the 4P’s of marketing mix: Product, Price, Place and Promotion (Luan & Sudhir, 2010). These are all tools available to a company to market a product and are mostly used in marketing literature. Hence, these are the elements visible for consumers when they find the product on the shelves. The four factors will be explained shortly.

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Secondly, the price of the product is a tool to differentiate from competitors. It is also a success factor that influences the chance of diffusion by consumers. Different price strategies may be adopted. Overall, two ways to make a profit exist; sell a lot and make a small margin on each unit or make a large margin on each unit and settle for lesser volumes (Ahmed et al., 2005).

Place; this entails locations where the product is sold, including visibility can influence

diffusion. Supermarkets, petrol stations, and other sales channels have only limited shelf space available. Therefore, manufacturers cannot introduce new products without convincing retailers another product should disappear. Retailers will have to be convinced of the potential profitability of the product (Ahmed et al., 2005).

Promotion entails the different tools that firms have to get consumers to buy more of their

products, possibly at higher prices. This entails advertising, coupons, in-store price promotions, in-store demonstrations, or premiums. Therefore, it is a broad dimension that entails both overall brand awareness promotions and specific product promotions (Ahmed et al., 2005).

These tools, also called the marketing mix, together make up an innovation as it is seen and evaluated by the consumer in-store. In this research, this is seen as factors that effect the adoption of an innovation by consumers. Hence, these are the aspects of a product innovation visible for consumers.

As was stated in the introduction of this research, it can be argued that besides these factors, also packaging can be considered a success factor and an important marketing tool. In times when competition is intense, packaging becomes another marketing tool for manufacturers to communicate with the consumer and convince the consumer to choose their product (Silayoi et al., 2007; Simms, 2010; Candi, 2010).To include this important tool in this research, packaging and its importance will be assessed in the next section.

2.5. Packaging

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its contents; and is a communication device providing details about the product, including price, contents, ingredients and nutritional value as well as cooking instructions and recommended use by dates” (Ahmed et al., 2005). Figure 9 shows the versatility of packaging: it performs several functions for both consumers and manufacturers. In literature, ‘packaging’ and ‘design’ are both used to describe the looks of a product. Design refers to the “exterior features of a product that are observable by consumers” (Talke et al., 2009). Packaging elements can roughly be divided into two blocks of components, or aspects of design: (1) graphic components: color of the packaging, typography, the graphical shapes and images used; and (2) the structural components: shape, size of the pack and the materials used (Ampuera et al., 2006).

Figure 9. Aspects and functions of packaging. Retrieved from Datamonitor/Hartman Group, via

http://www.fdin.org.uk/output

Three types of packaging have been argued to exist. Primary packaging is in direct contact with the product, such as perfume bottles. Secondary packaging contains one or more primary packages and serves to protect and identify them and to communicate the qualities of the product. It is normally discarded when the product is used or consumed. This would be the cardboard box that contains the perfume bottle. Finally, tertiary packaging contains the two previous ones and its function is to distribute, unify and protect products throughout the commercial chain. This would be the cardboard box that contains several bottles (Ampuera et al., 2006).

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packaging is that technological gaps between companies become smaller and core attributes and functions of products become more homogeneous. Firms try to differentiate by means of packaging and design (Reimann et al., 2010; Brunner et al., 2009; Snelders, 1999). Furthermore, designs can attract attention from a consumer (Reimann et al., 2010). It could be argued this especially counts for consumer grocery goods, since products all seem alike. Thirdly, the looks of a product seem to trigger positive responses from consumers, such as the immediate desire to own the product (Norman, 2004) and higher willingness to pay for the product (Bloch et al., 2003). The appearance of a consumer good is very much dictated by its package, thus changes in package design will influence whether the product is seen as novel and consequently will get product attention (Schoormans, 1997). Also, in marketing literature, packaging is considered to form part of the product and the brand; it is seen as an intrinsic characteristic of the product (Ampuera et al., 2006).

Packaging is often considered the most important communication media for a product for several reasons; it reaches almost all buyers in the category; is present at the crucial moment when the decision to buy is made; and buyers are actively involved with packaging as they examine it to obtain the information they need (Ampuera et al., 2006).

Packaging is argued to play a key role in product success, particularly in the FMCG industry (Simms, 2010), where shelves are stacked with somewhat similar products and consumers are overwhelmed. Packaging is also an important element of product innovativeness. The extent of package newness depends on the existing products in the market that fall into the same category. Thus, the design newness of a product depends on “the degree to which it has visual attributes in common with other members of its category”. The newer a product design is, the less attributes it shares with other members of the category. This view implies that the design newness of a product can be determined by comparing its appearance with those of competing products in the market at time of introduction (Talke et al., 2009).

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Packaging innovations most likely to succeed in FMCG 78% _77% _77% _77% 69% 69% _67% 63% 50% 41% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Percentage of shoppers claiming each feature is very important

Protects the product well Easy to open Easy to re-close Easy to dispense Easy to handle Easy to hold/grip Easy to store Tamper resistant Environmentally friendly Ability to see the product

Figure 10. Features of packaging that are most likely to positively influence the success of a packaging innovation. Adapted from Lacroix (2007).

Creusen (2004) discussed the roles of packaging for consumers. It should be noted that mostly durable consumer goods are used in this research. The following six factors were found to be of relevance (figure 11);

Appearance Role of packaging Influence on consumers

Attention drawing _{• Draw consumers attention in-store} Categorization _{• Influence ease of categorization}

• Offer possibility for differentiation from the product category Functional _{• Show features/functionalities}

• Serve as a cue for features/functionalities • Serve as a cue for technical quality

Ergonomic _{• Show parts for consumer-product interaction}

• Show consequences of use of overall appearance aspects (e.g. size, roundedness)

Aesthetic _{• Serve as a basis for aesthetic appreciation}

• Fit with home interior and with other products owned Symbolic _{• Serve as a basis for symbolic product association}

• Communicate brand image

Figure 11. Appearance roles of packaging, adapted from Creusen (2004)

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Talke et al. (2009) argue that design innovativeness may better help explaining the technical newness of innovations. They did not find a relationship in their research of the automotive industry. However, to assess if this relation exists for the FMCG industry, this is hypothesized as well in this research. This brings us to the third hypothesis; “Product innovations are more

successful when they are combined with a high degree of packaging innovativeness”.

This research will focus on the two aspects of marketing innovations that can make the new product truly innovative; Packaging and Product. The other P’s – Price, Place and Promotion – will be used as control variables.

2.6. Conceptual framework

This section will summarize the theoretical review into one conceptual model to use for analysis in this case study. This research concerns the influence of packaging on the success of innovation. In the literature review, several factors were found that have an influence on the success of an innovation. Success of an innovation depends on the (speed of) diffusion by consumers, as argued by Rogers (2003). Several factors can be used to market an innovation, as it is perceived by the consumer; the four P’s of the marketing mix. These are Price, Place, Promotion and Product. From the theory, it can be concluded that Packaging can be seen as another P that can be used to market a product, since it is regarded as an important marketing instrument nowadays. In this research, Product and Packaging are seen as the two dimensions that can be innovative for new product introductions. Either one of these factors can be innovative, both, or neither one. These are thus the two main factors in this research that will be used to answer the research question.

The other P’s, Price, Promotion and Place, will be used as control variables, and it will be assessed if these had a clear influence on the success of innovations. These variables also influence the perception of consumers of an innovation.

Innovation success and thus the speed of diffusion of innovation therefore depend on these five factors in the eyes of the consumer.

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Figure 12. Conceptual model.

Three hypotheses were formulated after conducting the literature review;

• Hypothesis 1; the higher the degree of innovativeness of an innovation, the bigger the chance of success.

• Hypothesis 2; innovations with a low innovativeness of both product and package (low complexity/low relative advantage) will have a high speed of adoption by consumers.

• Hypothesis 3; product innovations have a higher chance of success when they are combined with a high degree of packaging innovativeness.

As can be seen, two hypotheses are contradicting; hypothesis 1 states that products with a high degree of innovativeness will have a bigger chance of success, thus, innovations with a low degree of innovativeness have a lower chance of success. On the contrary, hypothesis 2 states that products with a low degree of innovativeness will be adopted quickly, despite their low relative advantage, thanks to their low complexity. It will be assessed in chapter 4 which of the hypotheses can be supported by the case study in this research.

After presenting the conceptual framework and the hypotheses, it is time to look at methods used to gather and analyze data. This will be executed in the next chapter (chapter 3). After this chapter, the case analysis and results will be presented in chapter 4.

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3. Methodology

This section will explain the methods used for data collection, selection and measurement of the variables used in this research.

3.1. Data collection

Data on past innovations in the chewing gum industry will be collected using the archives of LEAF Holland, where information on past product introductions and success is documented. Furthermore the GNPD database from MINTEL gives insights on new product introductions of all brands all over the world. An Internet research will also give insights on past product introductions. Among others the websites of Distrifood and Profnews give information on new product introductions in the FMCG industry. Moreover, they list the most successful product introductions and the long-term successfulness of these innovations. On the Internet, several web logs and forums give information on consumer opinions of products, which can be used as additional information. The data used is thus secondary. Also, online journals will be used that contain interviews conducted with chewing gum manufacturers and packaging experts. Finally, an interview was conducted at LEAF with Anique van Eeuwijk, Brand Manager of Sportlife from 2005 to 2010. This means she was working for one of the most important chewing gum brands in the time period of this case study. Therefore, inside information that is not available on secondary websites can be received and used to analyze the cases. Also, Mrs. Van Eeuwijk is used as an expert to indicate innovativeness of products that were introduced to the market. This will be explained in the measurement section.

3.2. Data selection

Several selection criteria have been applied to define the scope of the case study. First of all, only the three largest brands will be considered in the case study; Stimorol, Sportlife and Mentos. These are the largest chewing gum brands when looking at market share. Together, they have a market share of 73.6% at the end of 2010 (see section 4.1 for data). Two other relatively important brands in the Dutch chewing gum market are Xylifresh and Freedent. These are merely focused on the dental segment and therefore will not be taken into account. Sportlife, Stimorol and Mentos are relatively comparable when it comes to brand image, prices, and promotion budgets.

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Next, only new product introductions are taken into consideration as cases, line extensions are excluded. Line extensions only entail minor adaptations of existing products, in the case of chewing gum mostly new flavors or quality improvements.

The focus will also be limited to primary packages. Even though some data is only available for the entire product range – including multipacks - the attention will be on the single packs only. This packaging format is chosen because price promotions are carried out less often on single products, but mostly on multipacks.

Finally, focus of the data is on the food and petrol channels, even though some data is only available for the total sales along all channels. The food and petrol channels are the most important channels of sales for chewing gum.

3.3. Measurement

Several variables have to be measured for each case. In this section, an explanation will be given of variables that have to be measured, including the way this will be executed.

3.3.1. Categorizing innovations

To be able to draw a conclusion concerning the influence of packaging innovations on success, all cases used for this research need to be divided into categories; a distinction will be made between packaging innovativeness and product innovativeness. Packaging concerns the format of the package the chewing gum is presented in to the consumer. It concerns primary packaging only, as discussed before. Product innovativeness concerns the chewing gum itself; its shape, technology, coating, etc. These are all aspects that can make a chewing gum product stand out from existing products in the market and thus innovative.

To assess whether products are innovative with regard to packaging or the product itself, a five-point Likert scale is used. Besides the researcher, an expert is also asked to fill out the scale for each case for validation purposes. This is again done by Mrs. Van Eeuwijk. The two-rater method is chosen, because chewing gum is a low involvement product, as indicated before. Therefore, consumers might not be aware of the fact whether a certain product is ‘new’. However, this can be seen as a limitation of this case study and will be assessed in the section on limitations (chapter 5).

The scales can be explained as follows (figure 13);

Likert #

Classification Explanation Packaging

dimension

Explanation Product dimension

1 Not new at all Not new at all; format has been around for a long time

Not new at all; regular pellet gum

2 Not new Not new; format was

introduced before, but format is relatively new (introduced >2005)

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3 Somewhat new Packaging format is not new, but slight adaptation of existing format

Not a new technology, but adaptation of existing technology

4 New Adaptation of existing product format, perceived as new.

Existing product technology applied in a new way; flavor for adults

5 Quite new Totally new format to the market

New product technology; filled gum, uncoated

Figure 13. Explanation of the Likert scale categories, used to assess innovativeness of packaging and product and an example for the packaging and product dimension.

The results of the classification from both the researcher and the expert will be averaged and provides us with a classification of innovativeness of each of the cases. The cases will be assigned to four different categories, based on their innovativeness;

• Low product innovativeness, low packaging innovativeness • Low product innovativeness, high packaging innovativeness • High product innovativeness, low packaging innovativeness • High product innovativeness, high packaging innovativeness

3.3.2. Measuring success

Success is another variable that should be measured. Success will be measured using a variety of sources. Firstly, the Nielsen database can give sales information of the last three years. Unfortunately only data of the past three years is available, thus only innovations that were still on the market in 2008 can be analyzed. Next, industry information available from Distrifood and Profnews will be used. Both websites are professional websites that give information on new product introductions in the industry. Moreover, Distrifood issues the ‘Stayers top 20’ each year. This list gives an overview of the most successful new product introductions of two years prior to the year of issue of the list. This way, the long term success of the innovation can be measured. Finally, an interview has been conducted with Anique van Eeuwijk of LEAF Holland, who was Brand Manager of Sportlife during the time period concerning this case study (2005-2010). This expert interview provided additional information on the reason for exit of each innovation.

3.3.3. Control variables

The other P’s of the marketing mix; Price, Place and Promotion are the control variables in this research. These will be explained and it will be assessed if major differences exist for the cases for each of these factors. When needed, cases will be compared with respect to Price, Place and Promotion as well to see if a clear relation is visible.

Figure 14 shows the most important variables in this research and their measurement.

Variable Measurement

Packaging innovativeness (PACKAGE)

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Product innovativeness (PRODUCT)

Likert scale 1-5. ≤2.5 means innovativeness is low, because the product is ‘old’ or well known. >2.5 means a product is relatively ‘new’ to the market.

PRICE

(control variable)

Price of a single pack of the product when introduced, calculated per gum to be able to compare them accurately.

PROMOTION (control variable)

Spending of the major brands on promotion for each year. To assess importance, it will be mapped together with market share over the years.

PLACE

(control variable)

Shelf space claimed by each of the three major brands, compared to the share in value of the products on shelf.

Success _• Nielsen data on sales

• Distrifood Stayers top 20 / Intro top 20

• Year of entry / exit (>2 years on the market means it was likely a success, depending on the results of the other measurements of success)

• Expert interview (A. van Eeuwijk) for missing data

• Other secondary sources; Internet websites, GNPD by Mintel, profession al websites such as Profnews and Distrifood.

Diffusion of innovation The chance of product adoption; depending on five variables. Measured using secondary data and the expert interview information. In this research, diffusion of an innovation is a predictor for the success of an innovation; no or a very slow diffusion by consumers means no success.

Figure 14. Variables and measurements for this research

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4. Results

In this chapter, the results of the case study will be presented. First of all, an introduction to the Dutch chewing gum industry will be given for information purposes. This will create a proper background to understand the decisions made for limiting the scope of the research, and give an overview of the market. After the introduction to the industry, the cases will be presented.

4.1. Introduction to the industry

In this chapter, the Dutch chewing gum industry will be introduced for background information.

Chewing gum is seen as a life style product, this means that people often carry it with them, like to be seen with it and share the product with others. It is also looked upon as an impulse product; most sales occur at counter point, when consumers are reminded of chewing gum right before they pay for their groceries. Consumers often do not include chewing gum on their shopping list. The life cycle of products is short; time to market is very important due to the harsh competition in the market. The market is lucrative; there is a large turnover and margins are high. The margin is high because chewing gum is considered a life style product people are willing to pay extra for. Due to the increase of elderly people in the Netherlands, the chewing gum market is slightly under pressure. Chewing gum is a product mostly used by youngsters12.

The chewing gum market can be divided in four segments: refreshment, dental, kids and flavor. Products in these segments are all aimed at different consumer needs; the main reason for consumers to eat chewing gum is the refreshing aspect. Therefore, refreshment is still the segment with the largest growth possibilities, as can be seen in figure 15. Flavors are developed as a healthy alternative to candy; the products are sugar free, and have almost no calories (Supermarket Actueel, August 2010). Kids is the segment of bubblegum, packages are often accompanied with stickers, tattoos etc, to boost sales. Finally, the dental category is meant to care for teeth, and often consists of xylitol and other special ingredients. Towards the end of 2010, Refreshment is gaining in value, at the expense of flavor and dental. There is no clear reason or explanation for this fact. However, research shows consumers appreciate flavors, but are reluctant to switch away from refreshing flavors to fruit flavors entirely13. Refreshment currently consists of 65% of the category. Figure 15 visualizes the segments in 2009 and 2010.

12

http://www.profnews.nl/. Several articles see reference section.

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Segmentation shares end 2010 vs end 2009 62,9% 65,4% 16,9% 16,6% 5,0% 4,5% 15,3% 13,5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

End of 2009 Relative End of 2010 Relative

Flavour Kids Dental Refreshment

Figure 15. Importance of the different segments in the Dutch chewing gum market end of 2009 versus end of 2010. Data retrieved from Nielsen.

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Share turnover end 2010 vs 2009 4,0% 3,7% 15,7% 19,1% 30,1% 28,7% 13,4% 13,5% 5,3% 5,3% 27,0% 25,8% 4,4% 4,0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Turnover end 2009 share Turnover end 2010 share

Xylifresh Sportlife Freedent Other brands Stimorol Mentos Private label

Figure 16. Share in turnover of the different brands in the Dutch chewing gum industry.

LEAF Holland is the owner of the chewing gum brand Sportlife, aimed at active and passionate people, and mostly known for the six mint flavored base products in blisters. LEAF is a European confectionary company, selling its chewing gum products Sportlife and Xylifresh only in Belgium and the Netherlands. Sportlife was market leader until 2008, when Stimorol took over market leadership14.

The brand Stimorol is currently owned by Kraft Foods. Stimorol was the first to bring sugar free chewing gum to the Netherlands in the 1980s and is market leader in the Dutch market since 2008. Stimorol claims its success can be attributed to its (former) parent company; Cadbury, one of the largest companies in sugar confectionary that took over the brand in 2002. This company brought in a lot of knowledge, allowing Stimorol to introduce better innovations. The key to their successful innovations is claimed to be quality, mostly the long lastingness of the flavor is emphasized.

Mentos was introduced by Perfetti van Melle on the Dutch market in October 2006. Perfetti van Melle specializes in a short time to market15; the trajectory from idea to launch of a new

14

www.sportlife.com

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package or flavor is reduced to half of the average speed. Perfetti van Melle owns several sugar confectionary brands, are sells in over 130 countries.

Figure 17 shows market share development of the three main players from 2000 to 2010. As can be seen, Mentos was only introduced in 2006 and already had a 19% share in 2010. Sportlife lost leadership in 2008 to Stimorol.

Market share 2000-2010 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sportlife Stimorol Mentos

Figure 17. Market share of the three most important brands in the Dutch market from 2000-2010. Data retrieved from Nielsen.

Innovation is seen as important and vital for survival in the chewing gum industry (Drug Store News, February 2011). New innovations and initiatives are needed to establish growth. Chewing gum is an impulse product, thus consumers have to be tempted to try something new every time16. If producers do not innovate, they will be pushed out of the market. Moreover, by renewing the products, the quality of the chewing gum gets better, and the consumer will get more value for money17. Finally, innovations are important for the chewing gum industry because products can be copied easily and relatively fast.

To illustrate the importance of innovation, one brand did not survive the competition because of a lack of innovative behavior; Ben Bits, a brand formerly owned by LEAF. Even though other brands were innovative, Ben Bits stuck to its roots, and kept promoting its ‘sugar free’ image while other brands focused on more innovative packages, products and marketing strategies. In 2000 production of Ben Bits was ceased. At this time, only around 600.000 packs were sold each year, compared to over 130 million by competitor Sportlife. Successful innovations of the past have caused an increase in price and the possibility for consumers to vary (Supermarket Actueel, August 2010). Chewing gum has transformed from being a commodity product with a fresh taste, to a more premium product with various products especially tailored to different needs. Besides the ‘standard’ chewing gum, producers also

16

http://www.distrifood.nl/web/zoetenzout2010.htm

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offer so-called ‘premium gums’; more luxurious – and more expensive - chewing gums with an added value. Examples of these introductions are energy gum and chocolate-flavored chewing gum, developed for people on a diet. These are thus premium products with a ‘surplus value’18.

4.2. Cases

This case study will focus on all introductions of the three largest brands between 2005 and 2010, twenty-four in total. Figure 18 lists all cases that will be discussed in this research. The following information is listed for each innovation;

• Name of product • Year of introduction

• Unique Selling Point; what was new about this innovation?

• Motivation for entry; to what trend or competitor move did the product respond? • Package type; the focus of this research

• Product type; the focus of this research

Due to space considerations, the extensive information and facts of all cases, including references to sources, is included in Appendix A. Only the summary of most important information is provided in the table below.

Innovation Year USP Motivation for entry Package

type

Product type

Stimorol Fusion

2005 Flavor for adults + centre filled gum

New segment for using chewing gum: enjoyment, as a substitute for candy. Centre filled for long lastingness

Blister Filled gum, first mover in this field Sportlife

Alert

2006 Mental Energy Gum (guarana)

New functional gum to give people a mental energy boost

Blister Addition of guarana, but format is not new Sportlife Xplode

2006 Bigger gum People often use 2 gums at a time, to win back users lost to Stimorol Ice

Cool Box + blister

Slightly bigger gum, not unique Mentos

Gum

2006 Gum in a jar; new packaging

Use for in the house, office or car: on the go

Jar + blister Round shaped, but similar to existing gums Stimorol

Fresh Zone

2007 Mint flavored centre filled gum

After the success of fruit flavored filled gum, now also mint filled gum

Blister Mint flavored filled gum, follow up of fruit flavored filled gum Mentos Pure Fresh

2007 Filled mint gum with green tea

Filled gum was successful for Stimorol, so Mentos also became active in this category

Jar Mint flavored filled gum, follower of Stimorol Fresh Zone

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Mentos White

2007 Whitening chewing gum in a jar

Functional gum is trending, no whitening in assortment of Sportlife, Stimorol or Mentos yet

Jar + blister Whitening, not new to the market, used already by dental brands Sportlife Coolbox 2007 Most popular Sportlife flavor now also in cool box

To profit from Mentos’ success with jars. Most popular flavor now also in a jar Jar (slight adaptation Mentos jar) Smashmint gums; regular Sportlife Clash 2007 Combination of mint and chewing gum

To profit from the success of mints, and introduce a true innovation

Blister Mint + gum

Stimorol Pick ‘n Chew

2007 Stimorol gum now also in a jar

To profit from the success of Mentos’ jars Jar (round bottle) Basic gum Mentos Juice Blast

2007 Fruit flavored filled gum

Follow up of the success of Stimorol with Fusion (fruit flavored filled gum)

Pocket Bottle Fruit flavored filled gum already existed Mentos

Pocket Bottle

2007 A small jar for on the go, that fits in your pocket

Follow up of the success with jars, now a small jar that fits in your pocket, to compete with blisters

Pocket Bottle Existing products in market now in Pocket Bottle Mentos

Pure White

2008 Filled gum with white tea extract for whitening

Combination of success of Pure Fresh (filled gum) and White (whitening gum)

Jar Filled gum and whitening already on the market, so not new. Mentos Cube

2008 Cube shaped soft gum in a cube shaped jar

Follow up of the success of the jars, a new pack for a new experience

Square Jar Cube shaped soft gum

Sportlife GoEnergy

2008 Energy gum with caffeine

Credibility because of a cooperation with NOC*NSF

Blister Caffeine added as functional ingredient Stimorol Senses 2008 Soft gum in an envelope pack

More demand for premium concepts that give a luxurious feel to chewing gum

Envelope Long shaped, individually wrapped soft gums Sportlife

Real Fruit

2008 Fruit flavored filled gum

Copy of the Stimorol Fusion success and Mentos Juice Blast

Blister Fruit flavored filled gum Mentos

Aqua Kiss

2009 Soft gum in a stylish black envelope pack, some two layered gum

More demand for premium concepts that give a luxurious feel to chewing gum; similar to Stimorol Senses, but more premium thanks to black pack, and two layered gum technique is new to the market Envelope, black pack with mysterious look

Gum the same as Stimorol Senses, but two layers: new technology

Sportlife Real Fresh

2009 Mint flavored filled gum

Copy after the success of Stimorol mint flavored filled gum: to offer Sportlife users filled gum proposition

Blister Mint flavored filled gum

Sportlife Mixed Bag

2009 Bag, value for money proposition

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Sportlife Vibes

2010 New premium concept, developed for teens, bigger gums in a new squeeze pack

Developed after a research with teens: a new pack, with bigger gums. Response to the experience concepts introduced by Stimorol and Mentos, mysterious black pack Squeeze Pack Bigger gum, said to give a sensational mouth experience, no true novelty Stimorol Shift 2010 Flavor changing gum: from flavor to mint

New experience concept, to combine the power of Stimorol in both flavor and mint segment

Box (carton) with flip top

Flavor change in one gum: mint + flavor

Mentos 3 2010 Chewing gum with 3 layers of three different flavors

Follow up after the success of two layered gum (Aqua Kiss)

Envelope Three layered gum

Stimorol Fresh & Clean

2010 Functional gum with micro granules in the centre (powder filled gum)

Follow up after the success of centre filled gum with fluid. Now, powder filled gum, for a clean feeling of your teeth

Blister Powder filled gum

Figure 18. Cases used for the case study; new product introductions of Stimorol, Sportlife and Mentos from 2005-2010

In the next section, the two factors of innovativeness assessed in the conceptual framework, Product and Packaging, will be discussed, as these are the most important variables in this research. It is assessed what product and packaging innovations entail in the chewing gum market and what types can be distinguished.

4.3. Product & Packaging

In this section, Product and Packaging, the main focus of this research, will be assessed. The other P’s, the control variables, will be mentioned in section 4.6.

4.3.1. Product

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on kids or bubblegum. Stimorol’s Fusion created a new usage purpose for chewing gum: enjoyment for adults19.

Share Product types Gum

70,0% 68,0% 17,3% 16,1% 7,1% 11,0% 0,6% 0,1% 5,0% 4,5% 0,0% 0,3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% share 2009 share 2010 Powderfilled Bubblegum/Kids Compressed Non Coated Centrefilled Regular

Figure 19. Share of product technologies in 2009 versus the end of 2010. Source: Nielsen.

Despite the introduction of fruit flavored chewing gum and the different gum technologies, professionals argue chewing gum products today are not quite innovative. The latest radical product innovation was the introduction of sugar free gum, as early as the 1980’s. Today’s innovations, on the contrary, are said to be more incremental by nature20. In the next paragraph, packaging will be discussed, the other aspect of an innovation which can be innovative.

19 http://www.distrifood.nl/web/Assortiment/Assortimentsnieuws/Assortiment-artikel/138060/Stayers-2007-retail-aarzelt.htm

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4.3.2. Packaging

Packaging has been argued to play a crucial role as a marketing tool in-store. The power of innovations therefore does not only lie in product innovations, but also in packaging innovations. Moreover, chewing is a product with a badge value, a product that can play a role for your image. In this case, people are often willing to pay more for such a product21.

In the Dutch market, for long the blister was the most used packaging format. It was introduced in 1981 by Sportlife and proved to be a successful one; it is still the most popular packaging format in the Dutch chewing gum industry when excluding multipacks22. This can be seen in figure 20. This graph shows the share in turnover of the different packaging formats that are distinguished in the market. Multipacks, containing two or more single packs, are most popular. These are relatively cheap when compared to single packs. Examples of each packaging type mentioned in figure 20 can be found in Appendix B.

Packaging developments 2009-2011 1,8% _0,8% _0,3% 51,0% 52,4% _51,6% 2,4% 2,1% 1,9% 12,0% 12,0% _13,7% 22,6% _21,4% _19,6% 6,9% _6,4% 5,8% 3,4% _4,9% 7,1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Share 2009 Share 2010 Share 2011

Other Bag Blister Jar Pack Multipack Tube

Figure 20. Share of packaging formats at the beginning of 2009, 2010 and 2011. Adapted from Nielsen.

21

http://www.verpakkingskundigen.nl/.

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In the past decades, many new packaging formats have been introduced to persuade the consumer to buy the product. In the US, the same trend emerged; “Modern twists on everyday packaging embrace colorful graphics and catchy taglines, glossy papers and matte finishes, and recloseable flaps and lids that make products easier to open, close, carry and share”23. Worldwide, the trend of premium packages can be seen throughout the entire food industry. Jayne (2009) argues this general shift to the premium end of the market is comparable to Apple: the idea of premium products which are made for everyone. If a brand needs to reflect quality, fashion and coolness, a product’s package needs to reflect this. Differentiation needs to be continued in packaging.

The packaging type of each of the cases is assessed in figure 21 below. Data on the cases can again be found in Appendix A. The packaging types were also mentioned in the introduction to the cases in section 4.2. This figure is for illustration purposes. Of each product introduction, only one flavor is included in the grid. The figure shows that the blister and jar (in various shapes) were most popular (8 and 9 innovations respectively were introduced in these packaging formats).

Figure 21. Packaging types in the Dutch chewing gum industry. For the motivation of each placement of products: see Appendix A.

The effect of innovative package designs on the success of Fast Moving Consumer Goods