Importance of Packaging Development and Consumer Perception in FMCG Industry in Thailand

Running head: MANAGEMENT
The Importance of Packaging Development and Consumer Perception of Packaging
Development of FMCG industry in Thailand
Name of the Student:
Name of the University:
Author Note:

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Chapter 2: Literature Review
2.1 Introduction:
This refers to the second chapter of dissertation that focuses on the in depth study of the
importance of packaging development and consumer perception of the progress in the Fast-
Moving Consumer Goods (FMCG) industry of Thailand. The aim of the research lies in
providing a theoretical framework on examining how the packaging contributed to the aspect of
marketing specifically the New Product Development (NPD). The research aided in reviewing
the literature and developed the sole framework for the evaluation of the needs of parties that
seems relevant to developing the packaging including the members of distribution channel. The
framework aimed at providing newer insight into creation of the newer product opportunities by
adopting systematic ways of packaging development not evidenced in past.
According to Simms and Trott (2010), packaging play a major role in determining the
success of a product especially in fast moving consumer goods (FMCG) industry and can also
influence the purchasing decision of the consumers at point of the sale. Previous research in
business and marketing has however failed in recognizing the contribution of packaging on the
product and the business. However, packaging protects and surrounds the products from
manufacture till it reaches the final consumer. In certain cases, packaging has been actually able
to enhance the product during the lifecycle (Balme et al. 2001). Hence, packaging holds
immense significance as marketing tool within the FMCG industry which is considered one of
the most important industries based on the economic activities. For instance, the FMCG industry
of UK holds the responsibility of producing £125 billion consumer expenditure thereby

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contributing to over 8 percent of the GDP (Silayoi & Speece, 2007). In fact, it is an immensely
competitive industry which is dominated by international and the own retailer brands. New
Product Development (NPD) is a key activity of the brand owners of FMCG since thousands of
newer products appears every month on the shelves of the supermarket (Simms & Trott
2014).Thus without packaging, it would be difficult to hand over and market the products to the
consumers since it is not only inefficient but also costly. In present day society packaging is
both pervasive and vital.
2.2 Packaging History and Innovation
According to Risch (2009), packaging played a crucial function in determination of the
superiority of the food products by shielding against the chemical, environmental and the
physical barriers. Packaging provided protection against product breakage through exposure to
oxygen, moisture, carbon dioxide and various other aromas and flavors. Packaging possesses the
power of blocking the light by preventing the deteriorating of the product through loss of color
and nutrients (Coles, McDowell & Kirwan, 2003). Besides, providing passive protection
packages plays dynamic role in maintaining a product through maintenance of desired
atmosphere around product. According to Han (2005), packaging materials comprises of three
key functions of delivering protection, communication and utility in three detached
environments. The environments are solely atmospheric, physical and human. The goal however
lies in optimization of packaging for delivering the key functions in different environment.
Evolution of food packaging took place with the change in lifestyle of man (Brody & Lord,
2007). In pre-historic times people ate things gathered from the surroundings. Gradually people
transitioned from nomadic lifestyle to staying in the sheltered area which gave rise to the need of
containers for storing food. In other words, it called in for the need of packaging innovation.

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Until 1800, there has hardly been any sophistication in packaging materials since naturalitems
like gourds, shells and leaves and were used for holding food. Bamboo, wood and grass have
been used for weaving baskets. The early materials that would be used for shaping the food
containers have been paper, glass and pottery (Risch, 2009). It is interesting to observe that the
chief materials used for making glass at that time include same materials that are still used today
with certain additives used for giving color and varying properties.
Earlier developments of packaging indicated that industrial revolution brought about
development in the newer process of manufacturing (Appendini & Hotchkiss, 2002). Metal
comprised of the packaging material since they put across exceptional barriers for preventing the
product moisture and protecting its flavor. Later, the metals were used for the canning
operations. However, after the Second World War II, there has been increasing focus on the not
only the food but its quality. Various materials like plastics developed for war applications were
later used for food packaging after war. There have also been various developments for the
improvement in the food quality thereby allowing the consumers in having wider food variety
around the year. Plastic as materials of packaging have shown major levels of improvements in
the materials and the properties. Polyethylene has been the first plastic used widely for the
packaging of food.
2.2.1 New Package Innovation
There have been specific packages created for the newer categories of food that changed
the ways of delivering product to consumer. Metal used in the early 1800 has been replaced by
the tin plated steel (Marsh & Bugusu, 2007). Aluminium cans were used for packaging
carbonated beverages since the 1950s (Raheem, 2013). The aluminum cans were opened with the

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help of can opener before ring pull was introduced in the year 1963. It was in 1975 that the cans
were made available with the stay tab.
There was another package category used as part of the new packaging development. It is
the film used for the freshly cut vegetables in supermarket (de Abreu et al., 2007). It was
necessary for the packaging film to remain breathable to both oxygen and carbon dioxide thereby
preventing the entry of moisture. This represented a type of controlled atmospheric packaging so
that it can allot prolonged shelf life to the food and prevent the atmospheric gas to permeate
through packaging (Ozdemir & Floros, 2004). There was also introduction of laminated material
for packaging that combined paperboard, foil, plastic and gas barrier as the salient layer after the
introduction of Tetra Pack Co in the year 1951. This type of packaging was developed on a
unique type of machine. The machine allowed aseptically filling of product thereby resulting in
greater shelf life. The packaging found greater acceptance in other parts of the world.
2.2.2 Active Packaging Innovation:
There are various types of active packaging. One of the types is known as the susceptor
and is used primarily for the microwave foods particularly the popcorn (Brody, Strupinsky &
Kline, 2001). The very first bag of microwave popcorn had been sold in the year 1971 whose
package comprised of smaller paper bags made of double layer of paper and laminated with PET
film that lay between the layers of the paper, most suitable for usage in the microwave oven
(Suppakul, et al. 2003) The metalized film is comprised of thinner metal layer and interacts with
the microwave heat and energy up to 200 degrees temperature or higher. The generated heat
provides the energy necessary for the popping of kernels. Without susceptor, the product would
remain in the number kernel form.

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2.3 New Product Development (NPD): Idea Generation and Packaging
This particular study focuses on generation of idea, an initial stage of product
development and crucial part of NPD. The creation of newer ideas is considered a difficult task
for the organizations. Therefore, it is considered as the critical element of NPD process where
many organizations are believed to struggle. However, the issue becomes pertinent when
packaging is concerned. In this regard, Ahmed et al. (2005) highlighted that when packaging
acts as the vital component of the marketing mix there is a need of having pipeline of packaging
concepts and ideas in the development. However, there exist various brands that do not have this
kind of system. Considering the significance of packaging for the FMCG products, it can be said
that an absence of effective system of packaging development might result in higher rate of
product failure and lower rate of success of new product that finally results in higher cost (Filieri,
2013). Hence, packaging and opportunities it puts across for the improvement of performance
have been arguably considerable.
The aim of the research lies in filling the gap through development of a theoretical
framework for generating newer ideas of packaging. This helps in linking the role of the
packaging to the customers and the supply chain thereby helping in the development of newer
opportunities. This helps in putting across conceptual framework that aids in viewing the
packaging development. Besides, it also helps in the promotion of holistic approach towards the
packaging development through incorporation of various packaging levels for different products
thereby providing an opportunity for generating further ideas for the development of new
solution for packaging.
2.3.2 Marketing Perspectives on Packaging