Page 231 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes support all of the weight of the overhead load. Packing is meant to protect the commodity by
immobilizing and cushioning it, but temperature management can be made more difficult if
packing materials block ventilation holes. Packing materials can act as vapour barriers and can
help maintain higher relative humidities within the package. In addition to protection, packaging
allows quick handling throughout distribution and marketing and can minimize impacts of
rough handling.

10.1 Packaging Perspectives

Packaging refers to a container in which the product reaches the end use consumer. It is a part of
the presentation of the product and stays right till the customer takes it from the retail store. It
should not be confused with packing. Packing refers to the external protective covering used for
the safe transportation of the goods to the importer.

Example: Plastic box used to pack a set of embroidered handkerchiefs is an example of
packaging.

On the other hand, the corrugated fireboard boxes, which are used for packing the plastic boxes
for their safe transportation to the importer in the foreign country, would represent packing.
Packaging plays a very important role in the marketing of a product; it is a part of the augmented
product. The augmented product is that part of the product which deals with adding new features
to the basic product in order to exceed the customer expectations. These features take the form of
packaging, delivery arrangements, warehousing, customer advice etc., in order to add value to
the product. As a matter of fact, the competition between the exporters at the foreign market
place is not in relation to the core product or its basic tangible features but it is about the
augmented product. For instance, an expensive chessboard offered to a customer wrapped in the
old newspaper is very likely to lose out to an identical chessboard set neatly presented in a nice
matching box. In the latter case, the packaging makes it a more valuable product and offers more
‘value’ to the customer.
Exporters should formulate value rich offers to be made to the prospective buyers in the foreign
markets. The exporters can gain an edge over their competitors and secure business if their offer
is better than the best. This requires creativity in the formulation of the offer. The famous four
P’s (product, price, place and promotion) of marketing provide the framework of various decisions
to formulate the value rich offer. In relation to the product, creativity is not only in regard to the
basic product design, finish, use of various materials, quality specifications etc. but also in terms
of labelling and packaging of the product. Besides, the exporter can turn the growing awareness
with regard to protection of environment from pollution into a very effective promotional tool
in the foreign markets. The issues relating to environment protection, use of eco-labels and
environment friendly packaging has occupied the central place in the area of international
business during the later half of the decade of 90’s. Packing of the export cargo and proper
marking on the export boxes are equally important.
The logistics of execution of the export order suggests that once the goods have been procured
and processed or manufactured for the purpose of export, then the exporter should turn to the
issues relating to labeling and packaging. The decision-making processes involved in
procurement of materials/goods and mobilization of adequate amount of financial resources.

!
Caution The functions relating to labelling, packaging, packing and marking are in essence,
the marketing functions and the exporters should view them in this perspective to be
successful in the export markets.

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