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Managerial Project Task 3 Final Report

Consumer’s Preferences For Visual Characteristics Of Chocolate Packaging

Prepared for: Dawn Birch

Due Date: 26 October 2017

Background • The Australian retail industry is controlled at 80% y supermarkets (IBISWorld

2017a) : Ø Woolworths: 33.6% Ø Coles: 29.3% Ø ALDI: 8.9% Ø Metcash: 7.1%

• Packaging is often referred as a « silent person » in the aisle (Rundh 2012).

• The packaging attractiveness and the characteristics that trigger the purchasing decision differ for each person (Deliya & Parmar 2012).

Background

• Consumers think that a good packaging signifies a better quality product than one with a neglected packaging (Deliya & Parmar 2012).

• Chocolate is associated with pleasure; not a basic need, only the packaging differ a product from another in the aisle.

• Important to determine what characteristics in chocolate packaging are the most important for consumers.

Management Problem and Research Question

• Management Problem:

What are the visual criteria and qualities of the optimum chocolate packaging?

• Research Question:

Why and how is consumers’ choice influenced by the visual characteristics of the packaging when buying chocolate?

Research Objectives

1. To explore the importance of chocolate packaging in the consumer purchasing decision.

2. To determine how visual elements of packaging influence consumers’ evaluation of the brand.

3. To determine the optimum key visual characteristics of chocolate packaging.

Literature Review • Chocolate industry & packaging: • Australian chocolate manufacturing industry in 2017:

Ø Revenue: $6.1 billion (IBISWorl 2017b) Ø Profit: $610.9 millions (IBISWorld 2017b)

• Major companies market share: Ø Modelez Australia Horldings Pty Ldt (Cadbury): 15.1% (IBISWorl 2017b) Ø Nestle Australia Ltd (Kit Kat, Milkybar, Smarties…): 14.5% (IBISWorl 2017b) Ø Mars Australia Pty ltd (Mars Bar, Snikers, M&M’s…): 12.6% (IBISWorl 2017b) Ø Ferrero Australia Pty Ltd (Ferrero Rocher, Kinder, Tic Tac…): 4.9% (IBISWorl 2017b)

• Chocolate is related to pleasure for consumers (not vital), packaging quality increases the chocolate value/worth perception for the consumer (Shekhar & Raveendram 2013).

• Most important characteristics of chocolate packaging: visual aesthetics, information, material, ingredients, type of chocolate and percentage (Shekhar & Raveendram 2013, Giyahi 2012 ).

Literature Review • History of packaging:

• The evolution of men’s lifestyle led to the evolution of food consumption and storage habits (Risch 2009)

• The 1800s is when the first improvements in packaging material appeared (Risch 2009).

• In the 1900s, metal cans was used and then aluminium in the 1950s. Plastic was used later (20th century) (Risch 2009).

• Packaging components:

• Two categories of elements in packaging design: visual and informationl (Ahmad & Ahmad 2015) :

• The packaging has four roles: physical and barrier protection, convenience, information transmission and marketing role(Deliya & Parmar 2012) :

Literature Review • The seven most important packaging elements are the following (Deliya &

Parmar 2012): Front style, printed information, design of wrapper, packaging material, packaging colour, background image and innovation.

• Growing role of packaging:

• The packaging importance increased with appearance of supermarkets and self-service shops (Rundh 2012): from specialty stores (1900s) to the appearance of supermarkets (1930-50) (Ellickson 2011).

• 60-70% of the purchasing decision is made in-store (Cahyorini & Rusfian 2011) -> difficult for customers to make a choice between the amount of products proposed (Rebollar et al. 2012).

• Packaging has become a vital factor in the final choice choice (Rebollar et al. 2012) and is an integral part of the marketing strategy (Rundh 2012) -> the meeting point between the brand and the consumer (Cahyorini & Rusfian 2011).

Literature Review • Consumer response to packaging:

• Consumers are affected by different factors on the packaging: colours, quality of material used and packaging information, size and shape (Ahmed, Parmar & Amin 2014, Deliya & Parmar 2012).

• Consumer’s willingness to buy the product is affected by the placement of each element on the packaging: non-verbal on the left-hand side and verbal on the right-hand side (Rettie & Brewer 2000).

• Depending on the level of involvement of the consumer, the packaging will have more or less impact on the purchasing decision (low involvement level -> high impact of visual elements and the contrary for high involvement level) (Ahmed, Parmar & Amin 2014).

Gaps in the literature review • Little research about chocolate packaging available

• Which packaging characteristics are the most important for consumers when purchasing chocolate?

• Which of the characteristics identified in the literature impact the buying decision for chocolate?

• In what order?

Restatement of RQ/ROs • After reviewing the literature, the research question does not need to be

restated.

• The literature review gave too little information about the role of chocolate packaging on the purchasing decision.

• Restatement of research objective n.1: Ø Before: To explore the importance of chocolate packaging in the consumer

purchasing decision. Ø Now: To establish consumers’ order of preference in the chocolate

packaging elements identified in the literature review.

• This research objective becomes now RO n.3.

Methodology • Quantitative research (descriptive): explains phenomena and their

relationships through the collection of statistics and numbers (Torchim 2007, Muijs 2004).

• The study tries to explain the relationships between packaging elements and their influence on consumers’ choice -> quantitative descriptive research fits the best.

• Sampling plan: at least 30 respondents, chocolate consumers from every age and equal number of males and females. Method: simple random sample.

• Data collection methods: online survey posted on Facebook groups

• Data analysis techniques: creation of graphs and tables through Microsoft Excel, total and percentages calculation.

Data Analysis • Respondent profile:

• 60 respondents Ø Gender repartition: 37 females and 23 males Ø Age repartition: 26 between 18 and 25 y.o, 13 between 26 and 40 y.o, 14

between 41 and 65 y.o and 7 over 66 y.o.

• Respondents chocolate consumption:

• Most of the respondents regularly consume chocolate; about 60% said the had chocolate at least once or twice a week.

• With these results, we can assume that most of the respondents have a bit of knowledge about chocolate and know what they like or not in packaging.

Data Analysis

• Respondents chocolate consumption:

Data Analysis

• Respondents chocolate consumption:

• 63% of the respondents prefer Milk chocolate, followed by Dark chocolate (23%) and White chocolate (14%).

• In more details, it appears that males prefer Dark chocolate and females prefer Milk chocolate.

• Looking at age groups, people aged from 18 to 25 years old also prefer Milk chocolate (20) among the three categories presented.

Ø These findings strengthen the choice of presenting only Milk chocolate brands to respondents

Data Analysis

Data Analysis • Respondents chocolate brand awareness:

Data Analysis • Respondents chocolate brand awareness:

• Brands with the highest level of awareness from respondents: Cadbury (26%), Lindt (26%) and Nestlé (25%)

Ø Brands identified as market leaders in the literature review

• Brands with the lower level of awareness: Moser Roth (9%), Choceur (7%) and Dairy Fine (5%).

Ø The survey presents private label brands from Aldi (Moser Roth, Choceur and Dairy Fine), with the assumption respondents are not familiar with those brands, and thus, have little prejudices.

Ø Objective: to reduce the risk of bias in responses and to have deeper insights of the respondents real thoughts.

Ø The low level of awareness on the brands confirms that respondents have little knowledge on the brands.

• 0% of the respondents said they knew none of the brands presented

Data Analysis • RO1: To determine how visual elements of packaging influence consumers’

evaluation of the brand.

• Respondents were showed the following different chocolate packaging:

Data Analysis • Respondents were asked to rank in order of preference the packaging

presented (from most attractive to least attractive) Ø 67% ranked Moser Roth as the “Most attractive” Ø 62% said that Choceur was “Attractive” Ø 77% described Dairy Fine as the “Least attractive”

Brand 1: Choceur Brand 2: Dairy Fine Brand 3: Moser Roth

Number % Number % Number %

Least attractive 8 13% 46 77% 6 10%

Attractive 37 62% 10 17% 14 23%

Most attractive 15 25% 4 7% 40 67%

Total 60 100% 60 100% 60 100%

Data Analysis • Moreover, when asked to justify their choice, respondents said the following

answer: Ø 5 males and 17 females described Moser Roth as being more “Classy”,

“Fancy”, ”More luxurious look”, “Sophisticated” Ø 8 males and 13 females said that Dairy Fine looked “Cheap”, “Too similar to

a well-known brand (Cadbury)”, “Unattractive”, “Childish look”, “Not adapted packaging material (foil)”.

• 77% of the respondents judged Moser Roth to be the best quality (18 males & 28 females)

• 80% said that Dairy Fine was likely to be the worst quality (18 males & 30 females)

Ø It can be concluded that even though some respondents chose another product than Moser Roth as the ”Most attractive”, they still thought that it looked the best in quality terms.

Data Analysis • Then, respondents were asked to say which brand they thought to be the

most and the least expensive:

Data Analysis • Here again, the choice is clear: Ø 30 females and 20 males said that Moser Roth was likely to be “The most

expensive” Ø 24 females and 18 males judged Dairy Fine as “The least expensive”

among the three brands

• Finally, when asked which brand they would be more likely to buy: Ø Moser Roth was the first choice (43%), followed by Choceur (35%) and

Dairy Fine (16%). 6% said they would not buy any of the brands presented.

• And the least likely to buy: Ø Dairy Fine was first (51%), then Choceur (18%) and finally, Moser Roth

(13%). Interestingly, 18% said “None of the above”.

• Regarding the previous slides, respondents’ choice is consistent and the brand Moser Roth clearly stands out.

Data Analysis • Response to RO1: To determine how visual elements of packaging influence

consumers’ evaluation of the brand.

• According to the previous results discussed, it is clear that the packaging’s visual elements have an important impact on the consumers’ perception of the brand.

Ø Moser Roth is the first choice in attractiveness and is described as “More classy”, “Fancy”, “Sophisticated”. Moreover, even though it is judged as the “Most expensive”, it is still the first choice in the respondents likeliness to buy the brand.

Ø On the contrary, respondent think that Dairy Fine “Looks cheap”, is the “Least attractive”, ”The least expensive”, and with the lowest likeliness to buy the product.

• These results are coherent with the findings in the literature review: Ø Consumers are influenced by the overall look of the product and are more

likely to buy it if the packaging is attractive, with a perception of better quality (Shekhar & Raveendram 2013).

Data Analysis • RO2: To determine the optimum key visual characteristics of chocolate

packaging.

• According to the characteristics identified in the literature review, respondents were asked to rand them in order of preference (from ”Not important at all” to “Very important”).

• The characteristics presented were the following: Ø Type of Chocolate Ø Size, Ø Colour, Ø Image, Ø Brand Name,

Ø Package Material, Ø Ingredients, Ø Weight, Ø Country of Origin, Ø Instructions.

Data Analysis

• The size is considered “Important” at 45% and “Very important” at 27%. However, it appears that males consider it less important than females:

Ø 7 males and 5 females said it is “Little important” Ø 13 females consider it “Very important”, compared to 3 males Ø In the 18-25 age group, 10 respondents said it is ”Important” and 10 “Very

Important”

Data Analysis

• Colours are considered “Little important” at 42% and “Not important at all” at 38% and females thinks it is less important than males.

Ø 16 females and 7 males consider it “Not important at all” Ø 15 females consider it “Little important”, compared to 10 males Ø 46% of respondents in the group 18-25 consider it ”Not important at all”

Data Analysis

• Respondents consider Images “Little important” at 42% and “Not important at all” at 30%. Females thinks it is less important than males.

Ø 11 females and 7 males said it is “Not important at all” Ø 17 females consider it “Little important”, compared to 8 males Ø 7 respondents in the group 41-65 out of 14 (50%) consider it ”Little important”

Data Analysis

• Respondents said Brand Name is “Important” at 45% and “Little important” at 20%.

Ø 9 males and 18 females consider it “Important” Ø 7 females believe it is “Little important”, compared to 5 males Ø In the age group 18-25, 13 out of 26 (50%) respondents said it is ”Important”

Data Analysis

• Package Material is “Little important” at 37% and “Not important at all” at 35%. Males consider it less important than females.

Ø 10 males and 11 females said it is “Not important at all” Ø 6 males believe it is “Little important”, compared to 16 males Ø It is “Not important at all” for 9 respondents in the group 18-65 (35%)

and 6 in the 41-65 age group (43%)

Data Analysis

• Respondents consider Ingredients as “Important” at 32% and “Little important” at 30%. Females voted more for “Little important” than “Important”.

Ø 15 females and 3 males answered “Little important” to that category Ø 9 males believe it is “Important”, compared to 10 males Ø 10 respondents in the 18-25 age group said it is “Little important” (38%)

Data Analysis

• The main choice for the Weight category was “Little important” at 42%, followed by “Important” at 25%.

Ø “Little important” and “Important” are equal with 8 responses from males each Ø 17 females said it is “Little important” and 7 “Important” Ø 13 respondents between 18 and 25 (50%) and 5 in the 26-40 age group (38%)

consider it “Little important”

Data Analysis

• The Type of chocolate is considered “Very important” at 60% and “Important” at 38%. No respondents consider this category as “Not important at all” and only 1 responded “Little important”.

Ø The gender repartition is equal between “Important” and “Little important”. Ø The majority of the 18-25 age group (77%) said it is “Very important”

Data Analysis

• 38% of the respondents said the Country of Origin is “Little important” and 35% said it is “Not important at all”.

Ø An equal number of females (13) consider it as “Little important” and “Not important at all”.

Ø For the males, 10 said it is “Little important” and 8 “Not important at all”. Ø The category “Not important at all” was chosen by 7 respondents (27%) from the 18-

25 age group and 7 (54%) from the 26-40 age group. Ø 13 respondents (50%) of the 18-25 age group consider it “Little important”.

Data Analysis

• Instructions are considered “Not important at all” by 70% of the respondents and “Little important” by 22%. No respondent consider it “Very important”.

Ø 68% of females (25) and 74% of males (17) responded “Not important at all”. Ø For each age group, more than 60% of the respondents said it is “Not important

at all”.

Data Analysis • To sum up, the following table shows the respondents packaging

characteristics order of preference:

Order of preference

Packaging factor Importance Number %

1 Type of Chocolate Imp+very 59 98%

2 Size Imp+very 43 72%

3 Brand Name Imp+very 37 62%

4 Ingredients Imp+very 33 55%

5 Weight Not+little 37 62%

6 Image Not+little 43 72%

7 Package Material Not+little 43 72%

8 Country of Origin Not+little 44 73%

9 Colour Not+little 48 80%

10 Instructions Not+little 55 92%

Data Analysis • Response to RO2: To determine the optimum key visual characteristics of

chocolate packaging.

• According to the respondents answers, the “Type of Chocolate”, the “Size” and the ”Brand Name” are the most important factors, the “Key visual characteristics of chocolate packaging”.

• On the contrary, “The Country of Origin”, the “Colour” and the “Instructions” are the least important ones.

• This is coherent with the literature review findings: Ø The type of chocolate is one of the most important factors of chocolate

packaging (Giyahi 2012). Ø Moreover, the product size plays an important role in the consumers

purchasing decision process (Ahmed, Parmar & Amin 2014). Ø However, even though the literature review highlights the colours as an

important packaging factor (Deliya & Parmar 2012), the respondents ranked it 8 out of 10 in preference (10 being the less prefered).

Data Analysis • RO3: To establish consumers’ order of preference in the chocolate packaging

elements identified in the literature review.

• To answer the research objective n.3, respondents were asked to justify what characteristics of the brands proposed they preferred and justified their choices from Most attractive to least attractive.

• It appears that the main characteristics mentioned were “Colours” (22 times), “Image” (22 times) and “Packaging material” (17 times).

• In the justification for the “Most attractive” brand packaging: Ø “Colour” was cited 5 times by males and 12 females Ø 6 females and 2 males pointed out “Image” Ø Only 3 females mentioned ”Packaging material”

• Concerning the “Least attractive” justification: Ø 15 females and 5 males talked about “Image” Ø “Packaging material” was brought up by 6 males and 11 females Ø 7 males and 15 females stated “Colour”

Data Analysis • Moreover, the “Colour” characteristic is more important for males in the age

group 41-65 (mentioned 3 times out of 7) and females in 18-25 (mentioned 5 times out of 15).

• Concerning the “Image” category, the 18-25 age group is the group that talks the most about it (5 times out of 7 by males and 7 times out of 15 by females).

• Finally, “Package material” was brought up by 2 males in each age group, except for the Over 66 group. Females pointed it out 4 times in the 26-40 and 41-65 age groups. It appears that respondents do not like foil and plastic packaging material for chocolate.

• The other characteristics identified in the RO n.2 as being the most important have not been mentioned as often as expected:

Ø No respondents mentioned the importance of the “Brand Name”. Ø Only one male in the 18-25 age group made a remark on the packaging

“Size”.

Data Analysis • In summary, from the previous slides, it appears that “Colours”, “Image” and

“Package material” are more important for respondents than previously highlighted in the response to RO n.2.

• Thus, the packaging characteristics’ order of preference established in RO n.2 need to be reviewed. In the first table, “Image”, “Type of material” and “Colour” are positioned in the lowest lines (respectively the 6th, 7th and 9th position).

• In the new table, as the three factors were mostly the only ones mentioned, they were put in 2nd, 3rd and 4th position:

• The “Type of chocolate” is kept first as only Milk chocolate was presented and if was the characteristics with the biggest number of answers.

Order of preference Packaging factor 1 Type of Chocolate 2 Colour 3 Image 4 Package material 5 Size 6 Brand Name 7 Ingredients 8 Weight 9 Country of Origin 10 Instructions

Data Analysis • Response to RO3: To establish consumers’ order of preference in the chocolate

packaging elements identified in the literature review.

• In light of these new answers, it can be said that the “Type of Chocolate”, the “Colour”, the “Image” and the “Package material” are the most important factors in chocolate packaging for respondents.

• The “Weight”, the “Country of Origin” and the “Instructions” are considered the least important.

• Those findings match those of the literature review and some of the findings of RO n.2:

Ø The type of chocolate is still the most important factor (Giyahi 2012). Ø However, the findings confirms the theory that colours, the type of material

and the images used on packaging have an impact on consumers’ choice of chocolate (Ahmed, Parmar & Amin 2014, Deliya & Parmar 2012).

Data Analysis Summary • To summarize the previous slides, here are the main findings: Ø RO n.1: The sophisticated and classy look of Moser Roth made respondents

think it was better quality, thus it was the number 1 choice and they were more likely to buy it.

Ø RO n.2: The “Type of Chocolate”, the “Size” and the “Brand Name” appear to be the top 3 key visual characteristics of a chocolate packaging.

Ø However, it appears that there is a difference between what respondents though was most important for them and what are actually the most important packaging factors. Thus,

Ø RO n.3: Respondents written answers showed that in fact, their first choice in packaging characteristics are “Type of Chocolate”, ”Colour”, “Image” and “Package material”.

• Response to Research Question: Ø Consumers are influenced by the attractiveness of a chocolate packaging

and are especially critical about the colours, the images and the material used.

Recommendations • From the findings of this research, it is recommended that manager pay a

particular attention to the colours, images and the packaging material they plan to use when creating or reviewing a packaging.

• It is also recommended to conduct face-to-face interviews or even focus groups, where respondents would be able to see the packaging themselves. This will help gather deeper insights of the interviewees thoughts and to confirm or not the findings of this research.

Limitations & Further research • Due to the limitations in time, it was not possible to analyse the results with

specific techniques such as t-tests and ANOVA tests.

• For further research, these type of analysis techniques would be preferred in order to better understand the results.

• Because the survey was posted online (Facebook groups), there was no control regarding who was responding. Thus, there is a larger amount of females than males and the proportion of young people (18-25) is bigger than the other three age groups.

• The number of respondents (60) is too little to represent the actual population of Australia.

• For further research, a larger amount of people should be interrogated with a more equal proportion in gender and age group repartition

Conclusion • To conclude, the findings of this research allow to identify the four most

important packaging elements for consumers: the type of chocolate, colours, images and type of material used.

• Respondents relates the good look of a packaging (classy, sophisticated) to a better quality product.

• It is coherent with the secondary data gathered in the literature review.

• The research question and research objectives have been answered.

• However, the little number of respondents combined with the limited time available is not representative of the global Australian population. Further research with a larger amount of participants are needed to confirm or not these findings.

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List of references Muijs, D 2004, Doing quantitative research in education, Sage Publication, New Delhi.

Rebollar, R., Lidón, I., Serrano, A., Matín, J. & Fernández, M.J. 2012, ‘Influence of chewing gum packaging design on consumer expectation and willingness to buy. An analysis of functional, sensory and experience attributes’, Food Quality and Preference, no. 24, pp.162-170.

Rettie, R. and Brewer, C 2000, ‘The verbal and visual components of package design’, Journal of Product and Brand Management, vol. 9, no. 1, pp. 56-70.

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Rundh, B 2012, ‘Linking packaging to marketing: how packaging is influencing the marketing strategy’, British Food Journal, vol. 115, no. 11, pp. 1547-1563.

Shekhar, S.K. & Raveendran, P.T. 2013, ‘Chocolate packaging cues and first moment of truth: An exploratory study on young consumers’ mind’, Management Science Letters, vol. 3, pp. 1851- 1862.

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