Packaging: Not applicable, excessive (2)

Return to the geographical characteristics, from the "excessive" quagmire

Wen Liang Wen Feng


In recent years, the cost of liquor packaging has been continuously increasing, and the production cost of many liquor packaging products has accounted for 80-90% of the product cost, but the brand building has been lackluster. We believe that over-packaging is a corporate strategy mistake, and the cost imbalance of a company's products is just a manifestation of this mistake. It can be understood that if a company spends more on packaging than on its brand, it is overpackaging.

Now, liquor packaging has entered a vicious cycle from the misunderstanding of over-packaging, and this vicious circle has promoted the over-packaging of liquor. The more fierce competition, the more the pursuit of new, unusual, special, and luxurious packaging, and the new, odd, special, and luxurious packaging means higher production costs, affecting the profit rate of single product; single product profit rate is not high directly affect the corporate market Competition, making the brand weak, can not effectively distinguish between opponents, which plunged into terminal quagmire; to get rid of terminal competition, the vast majority of companies approach is through excessive packaging to overdraw the brand, increase the value of the product surface. This cycle has been repeated and it has not been broken or disappeared. This trend of excessive packaging will continue to inflict deep damage on the liquor industry.



Source: Sugar and Alcohol News

â–  Three incentives for utilitarian packaging
The over-packaging ethos arises from the excessive utilitarianism of all parties involved in the design and development of packaging. The utilitarian nature of the packaging design process mainly stems from the following aspects.

Immature consumers

The Chinese market is very large and development is uneven. Differences between the east and the west and the differences between urban and rural areas lead to different purchasing habits and consumption characteristics in different regions. These differences directly lead to different consumption standards in different regions, and the recognition and preference of the same products are also different. Even in the same provincial and municipal markets, there are still problems with difficult adjustments. On the other hand, there are many liquor products with different concepts. Consumers are not experts, and they cannot make an assessment of the quality of products. Consumers are passive, faced with too many products and different selection criteria. Brands are even more important. For most consumers, branding is a kind of consumer protection, a convenient way to simplify the choice. Because the brand contains the company's product quality assurance, service commitment, grade positioning.

But brands do not come overnight. There are not many trustworthy brands recognized by the market. Moreover, more liquor brands do not establish their own brand image in the minds of consumers. Consumers have a hard time choosing. In order to reduce the risk of consumption, consumers are more likely to demonstrate their immature consumption characteristics such as conformity and intuitive sense. Under such conditions, it is very difficult and expensive for ordinary liquor to make articles on the brand. Their common choice is to work hard on the packaging of consumers' first feelings, trying to change consumers' choices by influencing consumers' intuitive feelings.

It can be seen that the more immature market, the greater dependence of liquor on packaging. In fact, the so-called consumer immaturity is due to the fact that manufacturers do not have or are unwilling to do full-brand work, making product competition only stay on the surface of the packaging.

Manufacturer-oriented dealers

In the liquor industry, companies are paying more and more attention to dealers. It can be said that the vast majority of manufacturers' product development is dealer-oriented. Wine, packaging, pricing, and promotion must all seek advice from distributors, and even invite important distributors to participate directly in development. This is a progress in the corporate philosophy and reflects the advanced awareness of the market-oriented enterprises and the unity of dealer resources.

It's too late. Over-reliance on dealers and even dealer orientation will certainly lead to another misunderstanding of the company's products and brand management. Manufacturers and distributors have different roles, different interests, and different natural positions. Most dealers will only consider the current and future short-term competition, and will not stand in the long-term development of the company and brand building to plan and design. In particular, some brand buyout companies, most of them are based on the premise of overdraft companies. Therefore, we see that in the products that dealers participate in, the development and changes of new packaging are simply to expand profit margins and extend product life. There are few products that contribute to the accumulation of brands, and more products are overdrawn. This result is counterproductive, the company's product quantity is increasing, product packaging is becoming more and more short-lived, there are fewer and less profitable products, liquor is more and more impetuous.

Market-oriented, integrated dealer resources must be carried out under the unified corporate brand planning. Liquor enterprises must establish their own bottom line while enhancing the awareness of service distributors. It is necessary to form an effective brand accumulation. Otherwise, as the company’s market is getting bigger and bigger, brands are becoming more and more virtual, profits are getting less and less, and the time from being knocked out is getting closer and closer.

Design company is factory-oriented

It is no exaggeration to say that now 90% of the liquor packaging in the liquor industry comes from printing houses. This is related to the concept of cost savings for customers and fierce competition between printers. The low design cost and even zero cost meet the cost-saving requirements of customers, which is why printers compete for customers.

However, this is precisely an important cause of excessive packaging of liquor. First of all, based on cost control considerations, it is difficult for the packaging designer of a printing factory to have professional research on the liquor industry, it is difficult to put forward constructive insights, and it is only to satisfy the customer’s opinion as the ultimate goal. The customer is not professional about packaging and the designer is not professional, so the packaging made can be imagined. Second, based on profitability and customer satisfaction, designers are naturally willing to adopt complex processes and expensive packaging materials, because such packages are easier to produce, the packaging has higher added value, and the production profits are higher. Thirdly, in the course of many liquor packaging designs, creative and proofing times are reversed. The creative time is 1/5 and the proofing time is 4/5. There is not enough creative time in the early stage, and it is undoubtedly absurd to expect to make a good package through the later minor changes, but this is very common. Differences in the professional restrictions and positions of the designers of the printing factories have led them to think and design based on the brand construction of the manufacturers. Such packaging is difficult to get approval from the market, but the production costs are not very low.

â–  Reason, a long process
Although aware of the dangers of over-packaging, it is not an easy task to return to the rationality of white wine.

The root cause of excessive packaging comes from insufficient openness in the liquor market. In an open market that is not open enough, competition is limited and it is difficult for the market mechanism to fully play its role. To put it bluntly, it is not enough to reshuffle the liquor industry. Many small environments can also support the survival and development of some uncompetitive liquor. As a big tax collector, it is very difficult for many local liquor companies to exit the market. It is this market environment that makes the market's inspection of packaging power distorted. Some local heavy liquor consumers also influence the local liquor's pursuit of new, exotic, special, and luxurious packaging and lose their own personality characteristics.

Brand management is the basis of packaging design, there is no consistent brand core, and then luxurious and novel packaging design is no skin hair. Only after the liquor enterprise rationalizes its own assets and management structure and establishes a scientific system of brand management, the problem of excessive packaging of liquor can be changed. It will take quite a long time for companies to realize asset restructuring, change of business awareness, and establishment of a brand system.

The irregularity of the liquor packaging design market has also contributed to excessive packaging of liquor. To form a rational and professional packaging design atmosphere, the premise is that in the market competition, the dislocation status in the industry gradually loses its market. This is not something that can be accomplished overnight.

â–  Direction, heritage and development of regional culture
However, the trend of returning rational packaging to liquor is irreversible. The market is constantly opening up. With the deepening of competition, the market's ability to regulate and control will gradually show its strength. We are on the road to rationality.

In recent years, many regional liquor companies have attached great importance to the control of packaging costs. Liquor product competition is returning from a simple packaging comparison to the source-quality and brand competition. We have seen that some fast-growing local liquor brands have found their way and methods. Today, they are Shimao, blast furnaces, and Yanghe. They focus on product quality and brand communication with consumers. They have not deliberately pursued the so-called luxury packaging, but consumers are very much in agreement with their products.

To jump out of the vicious cycle of overpacking, we must use a more effective method to replace the original competition method. The development of small towns can give us useful lessons. When the nation’s small towns became a model, Zhouzhuang, Pingyao, Lijiang, and other small towns full of regional cultural characteristics became hot spots and became classics. Looking at foreign wines, whether it is Chivas or Johnnie Walker, regional characteristics are important support in the brand building. This is also true of white wine. The cultural elements with regional characteristics are the rich soil of white wine packaging. Traditional cultural heritage is close to the times. It is the development direction of liquor packaging, and regional culture will be the realistic path and the biggest business opportunity for regional liquor breakout.

(The author is the chairman of Shenzhen Feirengu Marketing Planning Co., Ltd.)

Source: Sugar and Alcohol News