1.0 INTRODUCTION
Research is ongoing
on the development of new products and improvement on the existing ones. These
products are sold across the world in different markets to various classes of
consumers by
different companies. These companies have to differentiate their
products from other competitors’ products in the market.
Companies differentiate their products by labelling differently.
Label is one of the legal requirements in identifying one company’s product(s)
from other companies’ products. Label is an important aspect of marketing. This
is because it describes the product, its elements and other details about the
product. This note examines what a label is, its characteristics and various
forms of labelling.
2.0 OBJECTIVES At the end of this note,
you should be able to:
·
define/describe a label
·
discuss its role in marketing
·
explain various forms of label
·
explain its legal consideration.
3.0 MAIN CONTENT
3.1 Definition of Labelling
Labelling is another product feature that requires managerial
attention. The label is the part of a product that carries verbal information
about the product or the seller. A label may be part of a package, or it may be
a tag attached directly to the product. Labelling is a subset of packaging.
Labels may range from simple tags attached to products to complex graphics that
are part of the package. It should be noted that there is a close relationship
between labelling and packaging, and between labelling and branding.
3.2 Functions of Labels
Labels perform several functions, and the seller has to decide
which one to use. They include the following:
(1) A label identifies the product or brand, such as the crown in Mercedes
cars.
(2) A label grades the product, such as canned peaches are grade labelled
A, B and C.
(3) A label describes several things about the product – Who made it?
Where it was made? When it was made? Its content? How it is to be used? How to
use it safely?
(4) A label promotes products through attractive graphics.
Before we proceed further, kindly attempt the following exercise:
3.3 Forms of Labels
Labels are classed as brand, grade and descriptive.
(a) A brand label is simply the brand alone applied to the product
or to the package. For example, some oranges are brand-labelled (stamped)
Sunkist or Blue Goose, and some clothes carry the brand label Sentorised.
(b) A grade label identifies the quality with a letter, number or
word. For example, canned peaches are grade-labelled A, B and C, and corn and
wheat are grade-labelled 1 and 2. Also, Peak milk is graded Nigeria and Holland
made.
(c) Descriptive labels give objective information about the use, construction,
care, performance or other features of the products. For example, in a
descriptive label for a can of corn, there will be statements concerning the
type of corn (Golden Sweet), the style (Creamed or in Niblet Romels) and the
can size, number of servings, other ingredients and nutritional contents.
3.4 Argument For and Against Labelling
Brand labelling creates very little stir among critics. While it
is an accessible form of labelling, the severe limitation is that it does not supply
sufficient information to a buyer. The real fight centres on grade versus
descriptive labelling, and whether grade labelling should be mandatory.
The proponents of grade labelling argue that it is simple,
definite and easy to use. They also point out that if grade labels were used,
prices would be more related to quality. They equally argue that grade labelling
might increase competition, because consumers would be able to judge products
on the basis of both price and known quality. The cost of grade labelling is
very low, so it would not place a greater burden on the manufacturer.
However, those who object to grade labelling point out that it is
not possible to grade differences in flavor and taste, or in style and fashion. A very low
score on one grading characteristic can be offset by very high scores on other
factors. For example, regarding Coke and Pepsi, some people claim that
Coca-cola is of high quality but has high gas content, while Pepsi Cola is of
low quality but has less gas content.
Companies selling products that score high within a given grade
would be hurt by grade labelling. It would not be possible for these companies to
justify a higher price than that charged for another. Some people also argue
that grades are an inaccurate guide for consumer buying, because the
characteristics selected for grading, weights assigned to them and the means of
measuring them are all established on an arbitrary basis.
Labels eventually become outmoded and need freshening; hence, marketing
executives should ensure that their labels meet the changes in the business
environment.
3.5 Legal Consideration
for Labelling
There is a long history of legal concerns surrounding labels,
packaging and generally products. In 1914, the US Federal Trade Commission Act held
that false, misleading or deceptive labels or packages constituted unfair
competition. The fair packaging and labelling Act, passed by the US Congress in
1967, set mandatory labelling requirements, and encouraged voluntary industry
packaging standards.
For example, in the past, the labelling of clothing, furs and
piece goods was often confusing and misleading to the consumer. As a result,
three important labelling laws were passed. The Wool Products Labelling Act (1940)
provides /that a clothing product containing any wool must be labelled to
explain clearly what kind of wool is used (virgin, reprocessed, etc.) and what
percentage of each type is included in the product. The Fur Products Labelling
Act (1951) provides that in identifying a fur garment, the label must state the
usual or natural name of the fur and its country of origin. And the Textile
Fibre Products Identification Act (1958) provides that clothing garments and
household textiles, including rugs, must carry the generic description of the
fibre content.
The food and drug administration
has also established a set of labelling standards for processed foods to ensure
full disclosure of their nutritional content. Labels must clearly state the
amounts of protein, fat, carbohydrate and calories contained in the contents of
the package. Vitamin and mineral content must be expressed as a percentage of
the recommended daily allowance. Also, ingredients must be listed in the order
in which they are contained in the product. It should be noted that this is not
exhaustive; there are other legal considerations/requirements.
4.0 CONCLUSION
Consumers’ desire to satisfy their taste, choice and other
marketing mix elements leads to mass production of goods and/or services by manufacturers.
These goods/services must be differentiated from one company to another.
Labelling is one way of differentiating these. Labelling is so important that
most consumers do not remember brand names of some products consumed, but
identify them through labels attached to them.
Therefore, a label must be well designed and shaped in order to
catch the attention of the target and prospective consumers. The social
significance of labelling should be considered as well. Necessary legal
requirements in respect of labels were exhaustively examined.
5.0 SUMMARY
In this note, we
examined label as one of the features of a product and its planning. Also,
discussed in this note are:
·
Functions of labels
·
Forms of label
·
Its legal requirements
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