“The effect of Innovative Packaging Design on Consumer Behavior in the Dutch Dairy Industry“

“The effect of Innovative Packaging

Design on Consumer Behavior in the

Dutch Dairy Industry“

Essential Elements when Innovating Packages

MSc.

Thesis

Amsterdam, 22

of May 2013

University of Groningen

Faculty of Economics & Business

MSc. Business Administration: Strategy & Innovation

Supervisor: Dr. R.A. van der Eijk

Second Supervisor: Dr. P. de Faria

Wietse Bandstra (s1671200)

Zomermeter 9

8607 GX, Sneek

Tel: 0614134306

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PREFACE

The Master Thesis that is lying in front of you is the result of almost a year combined of an internship at Dutch Dairy Company (fictitious name), conducting interviews with several experts and finding a subject related with both innovation as marketing issues. In the beginning of my internship I noticed the major impact of packaging which caught my interest. I’m very glad I had the opportunity to have found a dynamic subject of which I very much would like to know more about.

My first word of thanks goes to my supervisor, Mr. Van der Eijk for guiding me through the whole process of coming to this research. The experience of working one-on-one with someone who is highly educated was very pleasant for me. The advice and corrections given were always very constructive and helpful. I would like to wish him all the best in the future and hope he will find a lot of success and satisfaction in all his activities. Also my second supervisor, Mr. De Faria deserves thanks for checking my research for flaws. Next to my supervisors, Mr. Broekhuizen helped me during the initial phase writing a research proposal and coming up with a subject.

Secondly, I would like to thank all the participants/interviewees providing valuable data, which gave me the opportunity to investigate packaging in the Dutch dairy industry. If it were not for them, the thesis would never be written. Concerning all the interviewees, especially interviewee 8 supported me tremendously with his knowledge, ideas and help getting into contact with experts on different areas in the field of packaging. Also my supervisor during my internship S.T.W. deserves thanks for her motivational support, without her the process probably would have taken much more time and her lessons taught me a lot both socially as in the working environment.

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ABSTRACT

Product packaging has become an important player as a brand communication vehicle. There are many studies to be found that state important roles of packaging, however there is a gap concerning the packages of dairy products. The aim of this research is to examine packaging innovations can influence consumer behavior and to explore what roles or elements of packaging are important when innovating packages in the Dutch dairy industry. From the literature six roles were distillated: Convenience, Functionality, Logistics, Appearance, Environmental Friendliness and Brand Communication. Twelve cases of packaging innovations are discussed and next to that, scores on and between packaging roles and consumer success of packaging innovation and consumer acceptance were compared. The data is collected through in-depth interviews with experts in the field of packaging.

The results show that there are some doubts if “Logistics” should be a separate role and in the discussion Logistic Function is replaced by “Product protection” and logistics remains as a part of convenience where both Product Protection and Convenience are Functionalities. Further a new model is made where the hierarchy of the packaging elements is visually displayed. The new model is made based on the findings from the interviews in combination with the literature found. The new model is named the “Innovation Packaging Pyramid” and shows Brand Communication on top as there needs to be coherence within the brand and all other elements. In the center stands “Appearance”, as when one thing changes, the appearance of a package is likely to change too. On the base of the pyramid stand Environmental Friendliness and the earlier mentioned Functionality. This model is a “Weakest link model” as all elements need to be at a qualifying level.

Future research could use the new model to test relations between the four roles of package innovation (Brand Communication, Appearance, Functionality and Environmental Friendliness) at a consumer level. Another interesting field of research could be how package innovations could give the innovator a more sustainable competitive advantage next to how fabricants can be more innovative without the tremendous investments needed nowadays.

Keywords: “Packaging”, “Innovation”, “Convenience”, “Functionality”, “Logistic Function”,

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EXECUTIVE SUMMARY

The marketing mix with the 4 P’s is well known by marketing professionals. Some say the fifth P should be packaging as it is a very important marketing tool in a highly competitive market where products become more and more homogeneous. This research shows the importance of packaging on several fields and what elements are important when innovating packages. These elements turn out to be: Brand Communication, Appearance, Functionality and Environmental Friendliness. All elements are place in a new model called the “Innovation Packaging Pyramid”. On top of the pyramid, Brand Communication is placed as there always needs to be coherence with the appeal of the brand. In the middle Appearance is located, as whatever innovation takes place, appearance always changes along. On one side of the pyramid is Environmental Friendliness, a trend that is gaining importance over time, although it is not vital for innovation success or acceptance. On the other side of the pyramid the comprehensive element of Functionality is placed. Functionality is a group name for Convenience and Product protection. Convenience also means Logistic convenience (e.g. If a package is easy to carry, easy to store or easy to dispose). Remarkable is that often the consumers convenience is regarded more important than the impact a package makes on the environment. More convenience often means more plastic or other materials.

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INDEX

1.2 Innovative Packaging Design ... 12

1.3 Research Question: ... 14

1.4 Scope and Domain of Research ... 14

1.5 Overview of Chapter ... 15

2. LITERATURE REVIEW ... 16

2.1 Convenience of packaging ... 16

2.2 Functionality ... 17

2.3 Logistic function of packaging ... 18

2.3.1 Product Protection ... 18

2.4 Appearance ... 19

2.4.1 Aesthetic role of packaging ... 20

2.4.2 Symbolic role of a packaging ... 21

2.4.3 Ergonomic role of packaging ... 22

2.4.4 Functional role of packaging ... 22

2.4.5 Attention drawing role of packaging ... 23

2.4.6 Categorization role of packaging ... 23

2.5 Environmental friendliness of a package ... 24

2.6 Brand communication function ... 25

2.7 The acceptance and success of new packaging designs ... 26

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3.3.2 Interview Questions ... 36

3.4 Research method ... 37

4. RESULTS... 39

4.1 Reason for innovation ... 39

4.2 Experts versus Non-experts ... 40

4.3 Packaging Roles ... 43 4.4 Assembled cases ... 44 4.4.1 Convenience ... 44 4.4.2 Functionality ... 46 4.4.3 Logistic Function ... 47 4.4.4 Appearance ... 47 4.4.5 Environmental Friendliness ... 50 4.4.6 Brand Communication ... 51

4.5 Consumer Success and Acceptance of innovations ... 51

4.6 Interrelation of roles ... 56

5. DISCUSSION ... 59

5.1 Reason for innovation ... 63

5.2 New role: Product Protection ... 64

5.3 Consumer acceptance & success ... 65

5.3.1 Incremental package innovation... 66

5.4 Revised Conceptual Model ... 66

6. CONCLUSIONS ... 69

6.1 Implications for Theory ... 70

6.2 Managerial Implications ... 71 6.3 Limitations... 73 6.4 Future Research ... 73 REFERENCES ... 75 Literature: ... 75 Websites: ... 79 APPENDIX ... 80 A: Description of innovations:... 80

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INTRODUCTION

Food packaging has evolved from a simple container to hold food, to something that can play an active role in food quality and consumer selection. For a very long time, people just ate what they could gather in their surroundings. When the ‘hunters and gatherers’ quit their nomadic lifestyle to settle down, the need arose to store food. Up to the 1800s packages were not very sophisticated. It was the industrial revolution that brought development into the world of packaging, for example with metal cans manufactured for snuff (Risch, 2009). In the 1950’s, the role of packaging changed drastically, because of the information that had to be put on the packages and the package became essential in the product selling process (Olsson & Györei, 2002). In the 20th century plastics appeared when food packaging was commercialized after World War II. In 1970, Pepsi made the first plastic beverage bottle of Polyethylene Terephthalate (PET), still being used today (Risch, 2009). In the 1990’s, consumers became more and more serious on the environmental friendliness of packaging in terms of less packaging materials, re-using packages or recycling (Prendergast & Pitt, 1996). Currently; R&D departments of several manufacturers are investigating Polylactic Acid (PLA) which is a kind of plastic that is bio degradable (Risch, 2009). The last decade, consumers are becoming more demanding and sophisticated in their taste, meaning insisting on having a wider range of goods, through a growing range of channels, delivered rapidly and regularly (Olssen & Györei, 2002).

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to attract new consumers (Chen e.a., 2009). Dick & Basu (1994) add other advantages to brand loyalty like positive word of mouth and resistance against strategies from the competition.

The most basic functions of packaging are defined as having a logistic, marketing role or convenience role. The logistic role is mainly to protect the product during movement through several distribution channels. The marketing function provides an attractive method to the package to convey messages about products’ attributes to consumers at the point of sale as well as attracting attention to a product and reinforcing a products brand image. To consumers, the package should provide convenience of handling and storing the product (Prendergast & Pitt, 1996). Kassaye and Verma (1992) write in their study that companies have to find balance between traditional packaging functions (protection, preservation and promotion) and green packaging concerns. Reducing the amount of product packaging is seen as an important way of controlling the rising tide of trash. Many stakeholders of a products’ packaging, like consumer groups, governmental agencies, manufacturers and marketing intermediaries are becoming concerned to reduce waste and recycling.

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Many supermarkets have introduced Private label products that started as a cheaper alternative for A-brands, but quickly competed with A-brands on both price as quality. Retailers are always looking for suppliers that are innovative to differentiate and so they have the ability to invest in processing capacity and professional product development programs. Consumer values are changing on fields like greater convenience and functionality, but also from environmental issues and food safety. These changes in consumer demands and requirements of products have put pressure on suppliers to come up with new solutions, also reinforced by strong competition (Rundh, 2009). According to Jacobs (2007), Innovation is something new that adds value (to the consumer). The more radical, the more distant we are from what we now know and recognize. Innovation should ensure the development of products that are more efficiently produced, packaged for a longer shelf life, environmentally friendly, nutritionally responsive to all emerging segments of society and also meet food safety requirements (Silayoi & Speece, 2004).

According to Fornari e.a. (2009), manufacturing companies prefer to invest in consumer marketing, as trade marketing is becoming more and more important with the growing power and importance of the retailer. The risks of retailers accepting new products in their assortment can be countered by a judgment based on reputation and credibility, next to quality of sales policies, products’ market strength and of brands. The better the performance of a previous introduction, the lower the company risk for distributors. Furthermore, a retailer can use different types of criteria to decide whether or not to deal with a new product proposal. These criteria can be grouped into three main classes: Economic Criteria, Logistic Criteria and Marketing Criteria. The first two types can be referred to as efficiency considerations (i.e. cost structure agreements). Marketing criteria contains effectiveness considerations, like competitive position, marketing investments and sales potential. Sometimes pressure is put on the suppliers of products by retailers to be innovative (Rundh, 2009). Recent studies show that a direct relationship between innovative product sales and retailers’ performances (Fornari e.a., 2009

1.1 Packaging

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marketing mix, logistics is viewed as place (Olsson & Györei, 2002). Risch (2009) adds to this that packaging has three primary functions: protection, utility and communication.

Even though packaging costs a relative small part of overall production costs, it has vital functions supporting its competitiveness (Prendergast & Pitt, 1996). Packaging is ‘a coordinated system of

preparing goods for safe, secure, efficient and effective handling, transport, distribution, storage, retailing, consumption and recovery, re-use or disposal combined with maximizing consumer value, sales and hence profit’ (Hellström & Saghir, 2007). Paine (2001) calls the fundamental functions of packaging

to be protecting, containing, preserving and communicating the product. Rogers (2003) states that packaging design is vital to attract consumer attention on the one hand, but on the other, the product will be thrown away after its use. Therefore, consumers are hesitant to change and drastically altering a package design can confuse consumers. Consumers are often overwhelmed by shelves with similar products, all trying to attract the consumers’ attention (Simms, 2010) According to Goldman (2005), consumers are disappointed by the lack of new product innovations in the food and beverages market. However, many innovations (60-80%) fail and producers are pending other producers. Furthermore, successful innovations are often imitated quickly by both A-brands as private label products and therefore, it is hard to gain a sustainable competitive advantage as mentioned by Porter (1985).

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part in predicting consumer behavior. It is an added value for products and a mean to differentiate from competitors (Candi, 2010; Prendergast & Pitt, 1996; Silayoi & Speece, 2007; Simms & Trott, 2010). Consumers often find the usability of a package or “user-friendliness” of great importance (Colenbrander, 2003). Usability examples can be the protection of the product, weight and the ease to open, close and dispense a package. Innovations that improve the ease of use and protection of the product tend to be most succesful (Lacroix, 2007).

In the field of marketing, the marketing-mix with the 4P’s is well known to be Product, Price, Place and Promotion (Luan & Sudhir, 2010). Besides these traditional four P’s, it can be argued that also Packaging should be mentioned in this list as an important marketing tool. Especially with a high competitive market, package design is seen to be one of the most important instruments available that can convince the consumer to choose a producer’s product (Candi, 2010; Silayoi e.a., 2007; Simms & Trott, 2010). Hellström and Saghir (2007) add to this that often twice as much is spent yearly on packaging as on ‘above-the-line’ advertising and promotions. According to Ampuero & Vila (2006), the package of a product is considered to form a part of the product and the brand as it is seen as an intrinsic characteristic of the product. Also in the FMCG industry, packaging can play a key role in a product’s success (Wansink & Huffman, 2001). Place in the shelves is highly related to package design as also the place of a product influences the visibility (Ahmed e.a., 2005). Packaging is moreover important in front of the shelf, the point where a consumer makes its purchasing decision as it is the first thing they see (Ampuero & Vila, 2006; Sara, 1990). The package communicates to the consumers and can help increase the intention of purchase as it can settle the uncertainty if the product will satisfy the consumer (Silayoi & Speece, 2004). The importance of packaging is also growing. The reason for this is that difference in technology becomes smaller and functions or core attributes of products become more homogeneous. Packaging (design) has become an important factor within marketing and has a key role in communicating product benefits to the consumer. Product packaging is therefore also connected with other variables of the marketing mix (Rundh, 2009).

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2002). However it is unclear what elements of packaging are most important, summarizing the previous literature we can bring together six functions of packages into the following summation:

 Convenience

 Functionality (or Utility, Kassaye & Verma, 1992 and Risch, 2009)

 Logistic function (Including Product Protection)

 Appearance (as mentioned in Creusen & Schoormans, 2005)

 Environmental friendliness of a package

 Brand communication function

1.2 Innovative Packaging Design

Innovative packaging is mostly driven by the producers and/or brand owners of the product inside a package; the packaging industry rarely takes the initiative to innovate (Colebrander, 2003). On the other hand, Lacroix (2007) shows that innovative packages can make an immediate impact on a consumers’ product selection and price expectations, which can result into a positive return on investment of an innovation, increased market share or increased profit margin. Firms that launch more innovative new products generate higher sales in comparison with less innovative competing firms, which implies that managers should strive for a higher degree of innovativeness which also could have a better chance of meeting consumers’ latent needs (Talke e.a., 2009). Decisions to change packaging on the field of Ease of use, utility, package convenience or environmental friendliness mostly call for major expenditures for the manufacturer and also the desire to keep things the same by external forces, may make it difficult to readily embrace changes (Kassaye & Verma, 1992).

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behavior. Some examples are QR-codes, resealable closures, eco-friendly or recyclable packages, barcodes where you can trace the origin of a product and many more. Furthermore, aesthetic components like the material use, shape, size & color and text and graphics influence the preferences of the consumer (Dess e.a., 2005). On the long term, innovation is the only source of competitive advantage. For this reason, retailers place much emphasis on selecting suppliers who demonstrate a wish and ability to innovate (Fearne and Hughes, 1999). A successful innovation creates a temporary monopoly position. This newly gained position can positively contribute to the sales performance of not only the manufacturer, but also to the retail stores, especially if the SKU is in the mature phase of the product life cycle. Rundh (2009) concludes in his research that future research on packaging design should include packaging’s role in marketing strategy, for example the influence package design or the role of graphics has on sales. Innovation can help organizations to reinvent themselves and stay fresh while the business environment is changing and the management of innovation can be called an important strategic implementation issue (Dess, e.a., 2005).

According to Goldman (2005), the innovativeness of a product or the degree of innovation usually is a good measure for future product profitability, especially when a product is really new, instead of an imitation of an existing product. These “me-too” innovations mostly occur at Private Label products following a cost-leadership strategy. Hereby they reduce the risk that the innovation will not be accepted by the market. To pull the chart on innovation therefore, it is crucial to gain knowledge about how consumers will react to new products or product adjustments (Harmancioglu e.a., 2009; Milotic, 2006). Successful factors and the adaptation of different innovations are often mentioned in academic literature. However the relation of packaging and FMCG is more seldom to be found in the literature (Francis, 2006; Rogers, 2003; Talke e.a. 2009).

When talking about the design of a product, Talke e.a. (2009) give their definition to be: “Exterior

features of a product that are observable by consumers”. Designs can attract the attention of a

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making it a very interesting tool for producers (Bloch e.a., 2003). Package design can additionally give products a way to differentiate from its competitors (Reimann e.a., 2010; Snelders & Hekkert, 1999).

1.3 Research Question:

Following the preliminary theory, a lot of disagreement exists between what roles of packaging are most important for the consumer and how these elements of packaging are related. Based on this fact, the main research question can be formulated. This research will make an attempt to find what elements of new innovations in packaging design can have a positive influence on consumer acceptance and innovation success in the Dutch dairy industry. Furthermore this field of research is explored to find how the elements are related. The main research question therefore turns out to be:

“To what degree is consumer acceptance and innovation success affected by innovative packaging design in the Dutch daily fresh dairy industry?”

To further support the main research question, sub-questions are created. Sub-questions can be formulated as:

 How can the innovation of a new package give a contribution to the acceptance of a product?  When innovating packages how are the package elements of convenience, functionality, logistic

function, appearance, protection of product, environmental friendliness and brand communication related and what is influencing consumer behavior most?

1.4 Scope and Domain of Research

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will cover all categories. The outcomes of both the literature review as the case study will give a better insight into packaging innovation. The research will not handle with consumer reactions but will be from a consumer side of view. The domain this research expands its outcomes to is every market that is comparable to the Dutch retail market.

1.5 Overview of Chapter

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2. LITERATURE REVIEW

In the introduction, six roles of packaging were summarized. It is uncertain however how they are related, what is important in the eyes of the consumer when innovating packages and with what reason. This chapter will present theories pertaining to the in the introduction mentioned packaging roles and consumer acceptance and success. Multiple studies have been done on FMCG in general, but less is found on dairy products in specific. As the specific elements of fresh milk are different from other FMCG, not all the existing theory is applicable to and fitting with the dairy products. Packaging is multidisciplinary and the challenge lies in fulfilling the logistics, marketing and environmental functions of the packaging system. Within the definition of packaging, one can say there are three different types (Ampuero & Vila, 2006):

 Primary Packaging has direct physical contact with the product it is containing. In the daily fresh drinkable dairy products industry, most packaging is primary. This kind of packaging can also be called consumer or sales packaging.

 Secondary packaging contains one or more primary packages and serves to protect and identify them and to communicate different qualities of a product, e.g. if a product is new, a combination of different flavors or the price advantage when buying a multipack. Secondary packaging is mostly disposed when the product is used or consumed.

 Tertiary packaging contains the two previous ones. Its function is to easy distribute and protect products. These are often cardboard boxes. In the future, the Dutch supermarkets will move to more Shelf Ready Packaging (SRP), tertiary packaging that can be placed easily in the shelf also with containing marketing messages. From a consumer side of view, Tertiary packaging can help the consumer find a preferred product more ease as the tertiary packaging could induce more shelf impact.

In this research we will focus on primary packaging. However, secondary packaging is involved when for example 6-packs of 0,2 liters are sold as a whole and not individually. This way, the secondary packaging becomes the SKU.

2.1 Convenience of packaging

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convenience turns out to be a key driver for food choice over the whole world and this trend is likely to continue to increase as young consumers take their habits with them in old age.

It is a recent trend that consumers want packaging technology to reduce food preparation time. Technology should develop packages that have simpler functions, are more safe, better food preservation and are easy to use (Silayoi & Speece, 2004). Lacroix (2007) states that within all packaging innovations, a combination of innovations involving ease of use are most likely to succeed. Important elements of convenience can be:

 Ease to open: Especially consumers of age can lack the force in their hands to open a screw cap or other sealing.

 Ease to re-close: Re-sealable packages are handy as you can split the moment of usage into multiple moments.

 Easy to dispense: light weight, glass, foldable, plastics where the air can be pressed out.

 Easy to handle/tamper resistant: Some products are made for on the road. It is important that when you consume a product while moving, the package will prevent you from spoiling it on your clothes.

 Easy to hold: The grip, especially for heavy products is vital for a pleasant usage op a product.  Easy to store: Large families have to carefully arrange their refrigerator to stock their dairy

products. If a product is easy to store, less trips to the supermarket are needed.

The size of a package is an often neglected function. Unitization or apportionment of products to desirable amounts can make a better fit with the consumer, resulting in higher sales (Hellström & Saghir, 2007). With an ageing population and an increasing number of people living in smaller households, packaging has to adapt to these consequences. For example variety in sizes and easy to handle closings are specially made so less of the product has to be thrown away or to ease the effort for (older) people with less strength in their hands (Rundh, 2009). Olsson & Györei (2002) support the claim for convenience to the end consumer because it will lead to an increase in sales.

2.2 Functionality

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considering technology or materials used (Creusen & Schoormans, 2005). The features of a package can underline the uniqueness and originality of the product. Furthermore, quality judgments are largely influenced by product characteristics reflected by packaging. If it communicates high quality, consumers will expect the product is of high quality too (Silayoi & Speece, 2004; Hellström & Saghir, 2007). As mentioned before, the functionality of some packages has allowed the creation of new categories in retail stores, like fresh-cut produce and microwave popcorn (Risch, 2009). The functionality of a package can improve if simple and accurate information is presented in a prominent place and also improve the perceived product credibility (Silayoi & Speece, 2004). Prendergast and Pitt (1996) agree that packaging is a very attractive medium to convince the consumer about the virtues of a product. Some usability examples can be the protection of the product, weight and the ease to open, close and dispense a package (Lacroix, 2007).

2.3 Logistic function of packaging

Producers face a trade-off in the value chain as package producers will aim at standardizing packaging, so they can benefit from economies of scale. This is in contrast to the wish of retailers who are challenging this standardization through increased demands for differentiation and special promotions (Olsson & Györei, 2002). In the logistic function of packaging, it should reduce the occurrence of damage, loss through theft or spoilage. Also stackability is an important factor for efficient storage to the retailer and consumer (Prendergast & Pitt, 1996). For the logistic department, a package allows the product to be apportioned, communicated, contained and unitized. It is hard to separate the marketing functions of packaging from the logistic functions, since there are common areas of concern (Prendergast & Pitt, 1996). Within the marketing mix, logistics can be seen as “place” (Olsson & Györei, 2002).

2.3.1 Product Protection

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introduced a high density polyethylene (HDPE) blow molded bottle with a screw cap to make milk a portable beverage. The advantage is that the HDPE provides a light barriers which helps to prevent deterioration in the appearance and flavor of the milk. Furthermore it plays an active role in the quality of a product by helping to maintain a desired atmosphere around the product (Risch, 2009). For most food products, preservation is a vital function of packaging which will ensure the products’ freshness (Hellström and Saghir, 2007).

During the production process, packages should, depending on the product, be resistant to hot or cold fillings and be strong and suitable for high speed automated operations (Rundh, 2009). Packaging does not only protect the product from external factors, such as water, moisture, vapor, gases, scents, dust, shocks, vibrations or compressive forces (Prendergast & Pitt, 1996), but can also protect the surrounding environment from the product (Hellström and Saghir, 2007).

2.4 Appearance

Silayoi & Speece (2004) say that there are two categories of elements influencing consumer purchase decisions: visual and informational elements. Visual elements (graphics, size and shape) relate more to the affective side of decision making. Informational elements relate to information provided and technologies used in the package. These are more likely to address the cognitive side of consumer decisions. The way a package looks can have different effects on consumers. Size and color, texture and graphics are variables that can be modified and contribute to a successful package (Rundh, 2009). Silayoi & Speece (2004) say that visual package elements play a major role, representing a product for many consumers. This is especially so when the consumer is low involved and in a rush. Danger (1987) lists some basic rules that should be followed when dealing with the appearance of a package:

 Simple shapes are preferred to complicated ones.

 A regular shape will have more appeal than an irregular one and the latter may cause a mental blockage, which impels the consumer to something else.

 A shape that is not balanced will be unpleasing.  Shapes should be tactile and soft.

 A convex shape is preferred to a concave one.

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 Women prefer round shapes and they like circles better then triangles. Angular shapes are preferred by men and are considered more masculine. Men also prefer triangles to circles. Bloch (1995) states that the design or form of a package or product could contribute to a success in several ways when designers make choices regarding shape, scale, color, proportions, texture, materials, and ornaments. Creusen & Schoormans (2005) found six relevant factors influencing consumers. Table 2.1 shows, in order of percentage of mentioned appearance the different roles:

Appearance Role of Package Influence on Consumers

Aesthetic  Serves as a basis for aesthetic appreciation

 Has to fit within other products and home interior

Symbolic  Serves as a basis for symbolic product

associations

 Communicates brand image

Ergonomic  Shows parts of consumer-product

interaction

 Shows consequences of use of overall appearance aspects, like roundedness or size.

Functional  Shows features & functionalities

 Serves as a cue for features/functionalities

 Serves as a cue for technical qualities Attention Drawing  Draw consumer attention in-store, shelf

impact

Categorization  Influence ease of categorization

 Offers the possibility for differentiation from other products in the category Table 2.1: The Six Roles of Product Appearance for Consumers, adapted from Creusen & Schoormans (2005).

2.4.1 Aesthetic role of packaging

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qualities and the benefits that we are going to attain if we consume a product (Ampuero & Vila (2006). Transparent materials can help consumers to trust the insides of a package (Rundh, 2009). The aesthetic role of packaging is largely influenced by graphics. Graphics include layout, colors, typography and photography. For low involvement products, there is a strong impact from marketing communication and image building on consumer decision making (Silayoi & Speece, 2004).

For low involvement products, purchase decisions are usually made on pure liking (Silayoi & Speece, 2004). However, the influence of for example colors is often very complex. Bright colors may be valued on an aesthetic level, but may in the same time give consumers the idea that the product might be of low quality (Ampuero & Vila, 2006; Creusen & Schoormans, 2005). Characteristics influencing the liking of aesthetics are cultural, social and personal elements, all inducing a person’s taste (Creusen & Schoormans, 2005). Bloch (1995) adds that design acumen, prior experience and personality influence design taste of consumers. Aesthetics play a larger part in durable goods compared to FMCG. For example, sometimes a products appearance is liked by a consumer, but not chosen as it does not fit in their home interior. Furthermore, aesthetic and symbolic roles (see 2.4.2) should be distinguished as they can have opposite influences on the preferences of consumers. For example, someone who visually likes a colorful design might not buy it as it looks too childish of not appropriate. A products appearance can have an influence on perceived quality and functional product value. (Creusen & Schoormans, 2005). The perception and usage of beautifully designed products may provide sensory pleasure and stimulation. But on the other hand, objects with an unattractive form may evoke distaste (Bloch, 1995).

2.4.2 Symbolic role of a packaging

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2.4.3 Ergonomic role of packaging

The ergonomic role of a product means the adjustment and understanding of a product to human qualities. Consumers have to actually experience the operation of a product to adequately give a judgment (Creusen & Schoormans, 2005). Low weight is during transportation, but mostly during the transportation of groceries from the supermarket to home, is a major issue (Rundh, 2009). Also ease of opening, and re-close after usage, ease of disposal of after usage and childproof closure for some product categories are big challenges for packaging and packaging design (Rundh, 2009). A more elongated package is also perceived to be larger, even when consumers frequently buy these packages to experience their true volume. A different size can appeal to consumers with different preferences and levels of involvement. For example low price, low involvement products (e.g. generics) would be expected to have larger volume packages resulting in cost savings for the consumer who is looking for a good deal (Silayoi & Speece, 2004). The overall aspects of appearance, like material, roundedness and size, influence the perceived ergonomic product value for a consumer. These aspects are more indirect related to usage consequences, like the space a product needs, ease of handling or the ease of cleaning (Creusen & Schoormans, 2005). Also see 2.1: Convenience of packaging.

2.4.4 Functional role of packaging

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2.4.5 Attention drawing role of packaging

Gaining attention is an important initial step in making it possible for a consumer to buy a product. When a product stands out on a visual level compared to competitive products, there is a larger chance that consumers will pay attention to the product in a purchase situation. This because it “catches the eye” (Creusen & Schoormans, 2005). There is a growing recognition from managers to create differentiation and identity with packages, especially in relatively homogeneous perishable consumer goods (Ampuero & Vila, 2006). Visual novelty (like to make more shelf impact or drawing attention) draws attention to the consumer which is key to be part of the decision making process of the buyer (Creusen and Schoormans, 1998). With considerable competition at the retail point of sale, making an impact is crucial for a products survival (Hellström and Saghir, 2007). As with all point of purchase communication vehicles, the primary role of product packaging on the shelf is to generate attention by breaking through the competitive clutter in the store or at the supermarket (Silayoi & Speece, 2004; Rundh, 2009). It needs to trigger the consumer to purchase (Rundh, 2009). Package design must ensure that consumer response is favorable in comparison with the other competing packages. Products are mostly chosen without planning and a package that attracts consumers at the point of sale will help them make decisions more quickly in the retail store (Silayoi & Speece, 2004). A good example of standing out from the competitive clutter is the Philips hand-mixer called “Billy”. This product was the only one with a different color (black), while all the competition was white (Creusen & Schoormans, 2005). Similarities in graphics and layout by competing brands can also mislead the consumer, especially when they are in a hurry. For copycat brands, this is useful, but most consumers were disappointed when they found out about their mistake (Silayoi & Speece, 2004). The challenge of the attention drawing role is that attractive products are not always the most aesthetic appealing ones (Creusen & Schoormans, 2005). Rogers (2003) says that package design is vital to attract consumer attention on the one hand, but on the other, the product and package will be thrown away after its use.

2.4.6 Categorization role of packaging

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(1998) call for a clear balance in product design between visual typicality (like dark blue for full milk, green for yoghurt: makes it easy to categorize a product) versus visual novelty (to make more shelf impact, draw attention) of a package as this is crucial for a products success. Lacroix (2007) says that it is also important for consumers to see the product through the package. Category based evaluations are less occurred for durables compared to FMCG (Creusen & Schoormans, 2005).

2.5 Environmental friendliness of a package

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2.6 Brand communication function

There is an increased focus in packaging literature on the package’s role as a channel for branding and communication (Olsson & Gyorei, 2002; Silayoi & Speece, 2004). This is supported by Rundh (2009), who says that multiple studies suggest a growing role for product packaging as a brand communication vehicle for consumer products. It creates differentiation for homogeneous consumer goods, and Olssen and Gyorei (2002) say that an increase in efficient communication to the end consumer leads to an increase in sales. Brown (2001) says that success is no longer about product superiority, but it is all down to branding. Gershman (1987) says: “Packaging is the least expensive form of advertising” and “Every

package is a five-second commercial”. In FMCG, consumers tend to stay satisfied with a brand when

they find a brand which meets their standards, because impressions formed during initial contact can have lasting impact, especially if they are often reminded of the brand (Silayoi & Speece, 2004). Innovation that is promoted by a leader/master brand is mostly more intense and effective. The leader/master brand can widely contribute to the value creation process and compensate for costs of failures of promoted innovations of other brands (Fornari e.a., 2009).

Packaging is an important medium to communicate a brand’s message because a product’s message reaches almost all buyers in the category, it is present at the crucial moment of the buying decision and buyers can examine the package to obtain information that they need (Ampuero & Vila, 2006). According to Hellström and Saghir (2007), the communication function of packaging can be threefold: communication of information (like product content, destination/origin, means of handling), Promoting the product and to maximize the communication with end-consumers. Creusen & Schoormans (2005) show that a package can communicate an image of a brand so the consumers can derive symbolic value from it. The package serves as a basis for symbolic product associations. These associations are very personal and can be most important for the selection of products. Consumers sometimes need products to express themselves and support their self-image. A good name, an appealing package, a well-made logo and an eye-catching point-of-purchase display enables the brand manager to achieve the ultimate goal of influencing the behavior of a consumer (Shimp, 2001).

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packages perform a huge role in enhancing brand equity by fortifying brand awareness and building brand images via conveying functional, experiential and symbolic benefits. Brand image, trust, awareness and reputation are all painstakingly built up over the years. These brand aspects justify the higher prices paid by the consumer and are the best guarantee of future earnings (Kapferer, 1997).

2.7 The acceptance and success of new packaging designs

There are several definitions of newness in the literature like, originality, novelty, uniqueness or a-typicality. The degree of which a new product has visual attributes in common with other category members, the more ‘new’ a product design is. A new design can immediately affect the needs or values of a consumer to satisfy desires like affiliation, achievement, variety or self-expression (Talke e.a., 2009). However, only a small percentage (20%) of all newly launched SKU’s can be defined as really new products. The rest of the newly introduced European Article Number (EAN) codes were line extensions, meaning a new proposal of taste, color varieties or scent. Other new introductions were products just new to the manufacturing company, packaging/format adaptations (i.e. size) or enrichment of service contents (Fornari e.a., 2009).

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companies have gone back to old packages, like paper bags for bread to give it an artisanal or authentic feeling, even though the paper bag does not contains the bread as well as a plastic bag (Risch, 2009). In their study, Fornari e.a. (2009) classify four different types of new product codes, as is shown in table 2.2:

New adoption types Percentage of total

In & out 24,5%

Flop 68,4%

On trial 5,3%

Successes 1,8%

Table 2.2: Different types of new products (adapted from Fornari e.a., 2009)

“In & out” products can be defined as products that are inserted for tactical purposes, for instance on the occasion of promotional activities like multipacks or coupled sales. “Flops” are new SKU’s that did not manage to reach either minimum number of retail outlets of presence or a minimal level of average weekly sales. In some cases they are products that have not proven themselves at consumer and distributor level or are showing consistently negative performance. “On trial” products are characterized by medium levels of both average weekly sales and presence in retail stores. These products can be successful in the future, but do not perform consistently high on sales and distribution level. The smallest group is the “Successes. These products have obtained a constant high performance on both distribution and sales. Firms that launch more innovative new products generate higher sales in comparison with less innovative competing firms, which implies that managers should strive for a higher degree of innovativeness which also could have a better chance of meeting consumers’ latent needs (Talke e.a., 2009).

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2.8 Conceptual Model

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The dependable variables, measuring consumer behavior, are success of innovation for the consumer and consumer acceptance of new packaging designs and the success of an innovation . Figure x will show a visual representation of the expected relations between the roles of packaging, consumer acceptance and success. An improvement of one of the packaging roles is assumed to have a positive effect on consumer success and acceptance. Consumer Acceptance is the willingness to accept an innovation without hesitation, while Consumer Success means that the innovation brings more value to the consumer compared to the old situation.

Figure 2.1: Visual representation of expected relations between packaging elements and consumer success and acceptance.

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3. METHODOLOGY

This research will be done in a case study format. A case study is defined as an empirical enquiry that allows investigating a contemporary phenomenon within a real life context (Yin, 2003). Next to that, also questions like ‘how’ and ‘why’ can be answered besides ‘what’ and ‘who’ (Robson, 2002). Furthermore, a case study is used to explore terrain, but also first step to test theory. Although fewer events are emphasized, case studies can give a more full in-depth contextual analysis (Cooper & Schindler, 2006, p. 142). Exploratory research can be defined as a type of research design that has the primary objective to provide insights into and comprehension of the problem situation confronting the researcher (Malhotra, 2004). A case study can be based on any mix of quantitative and qualitative evidence (Yin, 2003). In this research multiple cases are used. The interviews with experts like an Innovation Manager, Packaging Development Manager, people from the R&D department specialized in packaging and the producers of the solid board packages are used to answer the research questions. Another interviewee works for the agency responsible for the 2D design of many packages found in the supermarket. Hereby, a wide array of experts is interviewed. In total 10 interviews have been conducted. Every interviewee was faced with 12 cases, where when the interviewee had little notice about the innovation, the data was not taken into account.

3.1 Context

To create a proper background and understanding the scope of the research, the industry looked upon is limited to the dairy industry in the Netherlands. The Dutch dairy industry is defined with daily fresh, ambient, drinkable and spoonable products (like yoghurt, custard and pudding). Next to this, one innovation is about the new design of an NPD in the coffee enrichers market. The Dutch consumers are traditionally large users of milk and other dairy related products. The last few years, the overall amount of consumed liters is declining slowly. Tenable/ambient milk or spoonable products (like yoghurt and desserts) also follow this trend. A difference between drinkable and spoonable products is that so called spoonables have a more impulse purchase pattern, while drinkable dairy is purchased more from a habit. In general, 9/10 of purchasers buy occasionally on impulse (Ampuero & Vila 2006).

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The definition of Fast Moving Consumer Goods industry can be explained as an industry with relatively low-priced products that are only used or consumed one or limited number of times (Baron e.a., 1991). Consumer loyalty is low on average and producers have to win over the consumer over and over again, except for the products with strong brand loyalty (Majumdar, 2004).

3.2 Case selection

Appendix A will expatiate on a selection of innovations within the packages of the Dutch dairy industry. Suggested innovations from the pre-attentive analysis that cannot be found in a retail store are excluded (for example the Bag-in-box innovation or non-dairy products). Appendix A will describe the selected innovations in more detail. The twelve selected innovations are:

1. Cans (semi-skimmed milk, 2,4 liter), made of PET-plastic able to have a bigger volume compared to carton packages. In the design of the can, a functional handle is part of the package. The product can be seen through the package.

2a. TBA Slim pull tap  TBA Slim cap, The aluminum pull tab caused a lot of mess when used by the consumers. Also the consumer had to take an extra step by pulling the tap, throwing it away before usage. With the (TBA Slim cap they turned to an one-step opening.

2b. TBA Slim cap  Tetra Edge (ambient milk, 1 liter), With the Edge not only the cap changed, but the whole package. The top is tilled and the cap is wider so gulping is prevented. However, the package returned to a two-step opening.

3. Elopak Gabletop spoonable cap (various brands, 1 liter), With the cap of Elopak, the consumer can reclose the package and contain it lying down after opening. Before, people had to fold the sides of the triangular top open, which was often a difficulty if it was sealed too firmly. 4. The Forest Stewardship Council (FSC), Hallmark that implies that the carton of the packages comes from responsibly held forests. The packages with this hallmark are also produced in an environmental neutral way. It helps companies to achieve their CSR objectives.

5. Double Layer/Clay Coated (1 & 1,5 liter), The inside of the double layered packages are brown from the inside as they have not been bleached by chloride. Next to that, the outside of the package is coated with a special kind of clay so the outside can be printed with a higher quality.

6. The change in package of tin-plated cans to the HDPE bottle (0,25  0,3 liter), The HDPE bottle was introduced to give the consumer more convenience as it can be resealed. This however changed the touch and feel of the package compared to the tin-plated can.

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once so the consumer will always have some milk at hand.

8. (Re-)Sizing (1  1,5 liter), Upgrade of the volume of the package to attract a new segment of so called ‘Heavy users’. The bigger size also goes with a pink band saying ‘Family pack’.

9. A new design for an NPD (S&S), With a new product, also a new package came where it was important that the package would communicate the brand message that the product would combine ‘The power of coffee with the softness of milk’.

10. Redesign of line extension (Dark chocolate variant), With line extension, in this case another flavor, the package has to change too. In this case, the package needed to still communicate the brand, while also stating clear the new flavor.

11. The Dessert of the year (Mon Amore pudding), Every month a different flavor is available and the one that is sold best will be crowned to the Dessert of the year in the month December. This package will be in the color gold.

Excluded are the complete new package of an orange juice brand in the ‘Out-of-home’ channel (Round shaped, looking more like an orange), the ‘Bag-in-box’ and the ‘impress cap’ found on some packages. The ‘impress cap’ looks on the outside like the ‘TBA Slim-cap’, but on the inside it opens the closed sealing by impression. These two examples were excluded as the products these packages contain are fruit-based drinks or because the product is not available at a retail store, implying a different kind of consumer and a different kind of function of the package. The innovations are assembled and specified along the six found packaging roles as can be seen in table 3.1:

Packaging roles Cases

A Convenience: Can, Pull tap  Slim cap, Tetra Edge, Gabletop  Spoonable cap, Tin-plate  HDPE-bottle, Multipack, (Re-)Sizing.

B Functionality: Can, Pull tap  Slim cap, Tetra Edge, Gabletop  Spoonable cap, Multipack.

C Logistics function: Can, Tin-plate  HDPE-bottle, Multipack, (Re-)Sizing. D Appearance: Can, Tetra Edge, Double layer/Clay Coated, Tin-plate

 HDPE-bottle, (Re-)Sizing, Design NPD, Re-Design of line extension, Dessert of the year.

E Environmental friendliness: FSC, Double layer/Clay Coated.

34 Table 3.1: Assembled cases to packaging roles.

The multitude of cases support the reliability and validity of the research. The twelve cases include several kinds of innovations. The six packaging roles are all covered by multiple cases. All the cases used are related to Dutch Dairy Company. However, Dutch Dairy Company is the market leader of dairy products over several product groups (fresh/ambient, drinkable/spoonable, desserts, coffee enrichers, etc.). It is likely that dairy products from brands not related to Dutch Dairy Company will respond the same way. Also the cases are highly representative to package innovations in the Dutch dairy market, improving generalization of the research outcomes. There is no indication products groups are missing from the selection of cases, however they are limited to the Dutch market. On the other hand, combining cases to packaging roles gives more global outcomes.

3.3 Data collection

The results from the research will show a combination of both quantitative and qualitative data. This way it can be made clear what factors are important but also how important these factors are and why they are important. The quantitative data comes from a 7-point Likert scale where “1” implies deterioration of the case considering a packaging role, “7” an improvement and “4” that regarding the packaging role nothing or nearly nothing has changed. All the questions asked and the line-up of the interview questions can be found in appendix B. The collection of primary data from interviews will start with the literature review (secondary data). According to Yin (2003) there are three principles of data collection:

 Make use of multiple sources of evidence  Create a case study database

 Maintain a chain of evidence

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3.3.1 Interviews

In Depth interviews will be held with experts (one on one) on the field of packaging. The interviews will be audio recorded and next to this written notes are made where after transcriptions are made. The interviews will probe the ideas of the interviewees about the cases. Open questions are asked and they indicate the rate of improvement of all innovations compared to the old situation on a 7 point Likert scale with respect to the different roles of packaging. The experts will help to classify every innovation and to categorize the innovation in specific groups of roles of packaging. This way the rate of improvement pertaining to the former situation can be indicated and which roles of packaging are trivial for package innovation. The interviews will be held with experts of one or more packaging role(s). They rate all innovations on several roles and afterwards the results are weighted to if it was given by an expert on a specific packaging role or not. It is expected that all experts have some knowledge on all fields of packaging. After every rating, the expert will be asked how relevant his knowledge and experience is on the specific innovation and package roles. If the expert does is not qualified enough, the case was skipped. A total number of ten interviewees were selected to be interviewed. The interviewees in order of appearance are:

1) Interviewee 1: Space Manager in the team of Shopper Marketing. Working for 33 years at Dutch Dairy Company and her predecessors. Working for 25 years with the space lab. Expert in the packaging roles of Logistics, Appearance and Brand Communication.

2) Interviewee 2: Manager Sustainable Business. Located for Consumer Products Europe in Amersfoort. Expert in the packaging roles of Appearance, Environmental Friendliness and Brand Communication

3) Interviewee 3: Manager Packaging Development. Cluster leader Product development & service. Located in Wageningen. Responsible for Durability, Food Safety and Design & Prototyping. Expert in the packaging roles of Convenience, Functionality, Logistics and Environmental Friendliness.

4) Interviewee 4, Purchaser in the team of Paper Packaging, Daily Fresh, located for Consumer Products. Expert in the packaging roles of Functionality, Logistics and Environmental Friendliness.

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6) Interviewee 6: Cluster Leader Packaging Development. Also active in account management and packaging engineering (product management). Not responsible for the design on a package, but knows the drill. Expert in all packaging roles.

7) Interviewee 7: Packaging Designer, not active in 2D but doing everything with 3D. Structural design of every element that has to do something with space. Expert in the packaging roles of Logistics, Appearance and Brand Communication.

8) Interviewee 8: Marketing Innovation Manager the Daily Fresh team. Working with several brands. Previously Marketing Manager for Out-of-home and Marketing Manager. Expert in all the packaging roles.

9) Interviewee 9: Marketing Manager. Active in how package innovations can generate more sales. Responsible for Market Research and giving advice to producers on package convenience and design. Also responsible for Public Relations. Only not an expert in the packaging role of Logistics.

10) Interviewee 10: Account Manager at design company for Dutch Dairy Company. Controlling internal creations. Testing the briefing and budgets of the client. Can be called a Packaging Design Consultant. Expert in the packaging roles of Appearance and Brand Communication. All interviewees had different functions and knowledge levels on both different cases as different elements of packaging. From all interviewees, 8 were employed by Dutch Dairy Company, while two came from partners of Dutch Dairy Company: Tetra Pak and Mountain Design. The input of non-employees strengthens this research in its reliability and validity. The total of ten interviewees came from different backgrounds, so on all fields of packaging roles enough valid data could be collected. The different backgrounds also staff the reliability of the outcomes.

3.3.2 Interview Questions

First the expert is asked about his or her name, current function and background. Next they have indicated their expertise on the different roles of packaging found in the literature, are they an expert or not. After a short explanation of the six roles, the experts are asked if they miss a role, would like to change one or if they have other thoughts on the six roles. Lastly before going to the cases, the experts are asked which elements could influence the success of an innovation.

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the interviewees reaction, varying from ++ (score 5) to – (score 1). After giving the ratings, the interviewee will be asked why he gave scores if they differ from the scores one would expect from the literature. Moving along all ten innovations, all experts were asked the following questions:

1) What is your knowledge level regarding the innovation? High/medium/low 2) How can this innovation benefit the consumer?

3) 7 point Likert scale rating for every innovation, per functional role (Convenience of package use, Functionality of package, Logistic Function of packaging, Appearance of package, Environmental Friendliness and Brand Communication). With follow up question if rating is not comparable with ratings based on literature.

4) Why was or wasn’t this innovation a success in your opinion? (++, +, +/-, - or --)

5) How was the new package design accepted by the consumers? Why? (++, +, +/-, - or --) 6) Which functional roles of packaging do you miss?

7) Is there something unmentioned regarding this innovation?

Control variables like: Price, Endorsement, Change in product or introduction of new product, Promotions, change in distribution.

In the beginning of every interview, the interviewee is asked about their current and previous functions. After this the interviewees are given a short explanation of the six packaging roles found in the literature. Then the interviewees are asked if they miss roles, would add one or change roles. After running through all the cases, the interviewees were asked the same question again. This research answers more the “why” question rather than the “how” or “what” question. The generalization of the outcomes are therefore more connected to the specific cases in the Dutch dairy market.

3.4 Research method

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expert on the 7-point Likert scale are however compared in the results section. If there are differences, an explanation will be given.

After the quantitative part, the research will continue with the qualitative part and tell what the 7-point Likert scale means. A data matrix per packaging role will show the most relevant statements. Also the data from the interviewees regarding suggestions for differences between the roles, additions and changes will be given. Furthermore the differences and similarities between the 6 roles with the assembled cases will be shown in the discussion chapter.

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4. RESULTS

In this chapter, the results of the case study are presented. First it will be determined if there is a difference between an experts opinion and non-experts. After this, the interviewees’ opinion about the packaging roles found in the literature will be showed in combination with their view on possible adjustments. After this, all remarkable results found from the combined cases will be presented for every packaging role.

4.1 Reason for innovation

When the interviewees were asked about the “reason for innovation and intended benefit for the consumer”, some interesting results came afloat. Many innovations could be called me-too-innovations, as other brands (from A-brands but mostly Private Label and Hard Discount stores) leaded the way (interviewee 2; interviewee 6). Also most innovations were first implemented abroad. Some leading countries regarding milk packaging are the UK, New Zealand and the USA. Consumer wants or needs were never directly a reason for innovation. In the case of the Can, the fabricant did however make use of the law of the handicap of a head start (Dutch: ‘Wet van de remmende voorsprong’). Private label cans also had a handle, but a rather inconvenient one. Extensive research at Dutch Dairy Company made the handle of their can more able to handle (interviewee 6; interviewee 7). In the case of the innovation from the TBA Slim pull tap to the TBA Slim cap (Case 2a) one would say the inconvenient usage of the pull tap, causing a mess when opening and pouring next to the carefully needed handling preventing leaking, would be enough reason to innovate. However it was only before the hard discounters (Aldi & Lidl) in the Netherlands came with the slim caps that Dutch Dairy Company also turned the wheel (interviewee 2). Also the Gabletop spoonable cap (Case 3) was implemented because another party (Private Label) came with a cap. Dutch Dairy Company had to go along to fund the price difference, even although the consumer did not ask for it (interviewee 7; interviewee 9). The innovation of the Edge (case 2b) came with a different reason, namely that the facilities due to several mergers were relocated and Tetra could offer a new package fitting with new packaging machines (interviewee 6). Furthermore, the Edge causes a disruption in the shelf. Dutch Dairy Company is the first in the Benelux with this package, where the old Tetra Brik Aseptic package (Case 2a) had existed since 1962 (interviewee 9).

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5). Another innovation concerning the environmental friendliness of a package is the double layer (Case 5). The brown color has a higher light barrier, compared to the package with a white chloride layer so the product is less affected by light (interviewee 7). No chloride means less contamination of the environment (interviewee 2). The new clay coating was specially developed for dairy and gives the possibility of the print of the packages to be whiter, although this is hard to see for an average consumer (interviewee 6; interviewee 9).

The convenience of a re-sealable bottle for a new moment (on-the-go) is the reason for innovation in case 6 (interviewee 3; interviewee 9). With the “Multipack” (case 7) three reasons for innovation came up in the results: Value for money proposition for the consumer, an extra service for the consumer with the functional handle and the ability to carry 6 times 1 liter packages and the service of pantry filling role (interviewee 6; interviewee 9; interviewee 10). The (Re-)Sizing (case 8) from 1 to 1,5 liter was done to address a new consumer segment (families and heavy users) and to give more convenience as now the consumer can make a more appropriate solution fitting with their personal situation (interviewee 1; interviewee 4; interviewee 5; interviewee 8). Interviewees 7 & 9 also name the ‘value for money proposition’ and the ‘Milk valorization’ to achieve the volume targets of Dutch Dairy Company. This milk valorization targets are also important in the market of coffee enrichers. In the Netherlands the coffee enricher segment could use uplift. Therefore a new SKU named S&S was developed. This NPD came with a whole new design (Case 9) where they tried to create a more premium proposition (interviewee 1). The design of case 10 had to fit with a new taste within an existing brand (interviewee 8).

In 1994 a decision could not be made over what pudding variation would be chosen. When someone said, “why can’t we just pick them all”, the idea rose to offer each month another pudding. In 1996, the dessert of the year could be chosen by the consumers. This way the retailer could not refuse the product as they would not be so stupid to not include the product the consumers chose (interviewee 2). Remarkable is that when running through the 12 cases, certainly half of them (1, 2a, 3, 5, 7 and 8) were implemented after Private Label or Hard Discount (Aldi & Lidl) did.

4.2 Experts versus Non-experts

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