Label: Meaning, Objectives, Functions, Types and Product Strategies

Meaning of Label

The information or notice about product, producers and its seller written or pasted on the product or its pack is called label. In other words, after packaging any product, meaningful and short description should be written. This called label. For this, a suitable leather piece, paper piece, or a tag is pasted or hung on the pack writing or printing information or notice about the product on it.
Goods are produced for consumers. They have also the right to know about the products. so, how to use the product, how to keep it safe, what is its mix, when was it manufactured, when is its expiry date, up to when can it be used etc. should be given on label. Such tag or label helps the consumers in its use and its production company to promote it.

Labeling plays an important role in business world. Some products are such that they invite dangers if they do not contain correct and true information. So, the producers should compulsorily give tag writing necessary information on all the products. Specially, if labeling is not given on medicine and poisonous products, unexpected dangers and crisis may ensue. True informative labeling is also compulsory for many other different reasons. This provides necessary as well as valuable information about quality, brand, features, etc. of the product.

Different writers and experts have defined labeling of products. Among them the following are very important:

According to Prof. William J. Stanton, “Label is the part of a product that carries verbal information and manufacture’s identification. Labels can perform both informative and promotional functions.”
According to Pride and Ferrel, “Labeling is used on package to provide instruction, contents, certification and manufacture’s identification. Labels can perform both informative and promotional functions.”

Good labeling also makes clearer about the contents/ composition and percentage of the ingredients of the products. The above mentioned definitions also make it clear that the short information given on packs is called labeling. This gives important information about the product. In this age of business competition, labeling may become more fruitful. Even these simple arguments make us realize the importance of labeling. Besides, labeling also makes buying and selling easy and convenient.

Objectives of Label

Label provides description of the products to the customers. Label presents information about features, quality, utility, price and using method of the product. So, label also has its own importance and objectives. The main objectives are as follows:

1. Information to customers

Labeling and packaging are closely connected. Label provides necessary information to customers. It helps the concerned sides to good identification of products. The main objective of labeling is to provide more and more information about the product to all its customers.

2. Social significance

Label has the objectives to provide both informative and promotional information to the society of its target markets. Products produced for certain society should be supplied to markets or sale centers only after giving correct/true label. Any medicines or poisonous products to be distributed to certain society should also contain words of warning and caution. In this way the labeling increases social importance.

3. Consumer protection

Labeling should also pay special attention to customer’s welfare and protection. If components, composition or ingredients, utility, weight, price etc. of the products are mentioned on label, there does not remain any dangers or confusion for customers. If the weight is different due to some accidental reasons, the customers can get legal remedies. So, labeling protects consumers.

Functions of Label

Label should give important and short information to the customers about the quality and feature of products. Label should be so informative that the consumers can get every information about quality, features, size, get up, using method, etc. by reading the label. Besides, label plays some other important roles. The main functions of label are as follows:

1. Identification

Label gives short identity of the product. It also gives intrinsic value of the product. So, the customers decide to buy the products being clear by looking at the labeled identity.

2. Grading

Labelling divides products in different grades. For example: some one type of products can be divided as A, B, C, D grades. They can be classified as A, B, C, D grades on the basis of quality of the products. Classified in this way the customers can decide to buy any class products they like.

3. Description

Label of the products provides different descriptive information about the products. In this modern age, most of the products are given descriptive label. In fact, this type of labeling has been proved to be very useful to the consumers. Nowadays, the following things should be included in descriptive labeling.
  • Manufacturer’s name,
  • Product composition,
  • Manufacturing date,
  • Using methods,
  • Expiry date,
  • Quality of product

4. Promotion

Label of product helps to promote the product. The product is decorated with attractive design, figure or make up. This attracts the customers and entices them to buy it. Labeled product plays the role of advertisement. In this way, label provides promotional help to the producer, or distributors, or sellers. So, low standard label should not be used. It adversely affects sale.

Types of Label

Products can be labeled with methods. There are specially four types of labeling. They are classified in four categories as follows:

1. Brand label

Brand and label are two different activities. However, in some condition, they may be used together. If only brand of the product is used in packaging of the products, such label is brand label. Close Up toothpaste, Dettol, Puja Soap, Diyo Soap etc. are the examples of brand labeling. As brand itself does the works of label, it charges low cost. It does not affect price of the product. This also simplifies to recognize by both sellers and buyers and to sell and buy.

2. Grade label

Products may be of different classes, groups, and grades. The label used to give true information about the products is called grade label. This type of label indicates the quality of the product through sign, symbol, letter, or word, or number. While using such label, brand name of the product should also be used. As it reflects the grade, taste, and quality of the products in markets, it helps buyers to buy according to their capacity.

3. Descriptive label

Descriptive label provides information about features of the products. Nowadays, this type of labeling is used in most of the products. Descriptive labeling is used in the products which become difficult to give grade. In the eye of consumers, descriptive grading becomes useful. Manufacturer’s name, product ingredients, manufacturing date, expiry date, quality of product, method of use etc. are mentioned in this type of grading.

4. Informative label

The label which gives instruction and information about the product is called informative label. Necessary instruction is given to take care of and about the use of the product. Such information and instructions become very useful to the customers. So, most of the customers give priority to informative label. Mostly brand name, manufacturer’s name, address, packaging date, expiry date, retail price, instruction for special care, etc. are given in this type of label. Similarly, weight, necessary caution in using the product etc. are also mentioned on the label.

Product Strategies in Nepal

Different producers or companies produce different goods also in Nepal. These products as in other countries enter the life cycle. It becomes very difficult for the Nepalese products to compete with the other products in quality, features, shape, size utility, etc. in markets. Even in such fierce competition, other products are
also produced besides agricultural products. Products of some companies can be mentioned as example. Nepal Liver Limited produces Pepsodent Toothpatse, Lux Soap, Vim Soap, Sun-silk Shampoo, etc. Himal Electric Company produces Bulbs, Fan, Toster, Cooler, etc. Royal Drug Limited produces
Cetamol, Nediquen, Amjeet, R.DSole, Jeeven Jal, Fenodin, and other medicines.

Rajesh Metal Crafts Limited produces Roofing Tin, Chaudhary Group produces WaiWai Noodles, Big MiMi Noodles, LG Television etc. Pokhara Noodles Private Limited produces Jo Jo Noodles, Swostik Oil P. Ltd produces Soyabean oil, Nebico Pvt. Produces Thin Ararot Biscuits, Golden Battery Industry produces Tiger and Yasima Battery. In the introduction period when such products enter in the product life cycle, one needs strategy to fix low prices compared to the foreign products. But, if there is lack of competition in market more price can be fixed.

For the products which have entered the development stage, design, features, quality etc. should be changed if possible. Along with this, a strategy should be adopted to enter new market segments. At this stage of the product, efforts should be made to include new distribution channels. But, the Nepalese companies may lack economic resources and expert manpower due to which they may be compelled to postpone such strategies.

Efforts of market expansion should be made for the products which have reached maturity stage. At such stage, the customers who want to use products late should be attracted towards the marketed products. Similarly, promotional activities should be conducted to attract customers who use the products only on some occasions. Strategies for improvement of the products should be searched out. This increases sale of the products. But the Nepalese producers have to face difficulties to find new customers, enter new market segments and improve quality of the products.

At the stage of decline of the products, researches and studies should be conducted to identify the weakness of the products. Production of such goods should also be closed in time. On the other side, investment in promotional activities also should be gradually decreased/ minimized. In such situation, rare products can have chances to continue in markets. So, products should be brought again to markets only after improving their quality, features and utility. Otherwise, market competition cannot be faced. Nepalese products are facing challenges and fierce competition with Chinese and Indian products.

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