Monday, March 20, 2006

Today's Consumer Is A Moving Target

Today’s consumer is a moving target. Choosing the right consumer and the right demographic to target is an important decision. Monitoring what is hot and what’s not can dramatically influence a package design’s success or failure. Package design is an integral way to connect with your customer. But do you clearly understand the needs and wants of these elusive markets?

Understand the customer is critical.
The problem today is that one package may not satisfy the needs and requirements of all buyers. There are many niche markets out there and each one requires specialized packaging. So if you are targeting one of those, do your research first. What works for one target market may not work for another.
EXAMPLE: Child resistant closures on medicines are almost impossible for those over 50 to open.

Market Trends:
Here are a couple of important market trends that will affect who will or will not buy your product regardless of how innovative or well designed it is.

1) People are buying in smaller quantities. Our busy lifestyle keeps many people from eating at home on a daily basis. Gone are the days of the sit down dinner with the entire family. When these occasions due occur it is usually a holiday or a special occasion. The notable exception is the over 50 generation that now have the time to cook and enjoy a leisurely dinner at home
What this means to you: People are looking for smaller sized packages and are willing to pay a premium. A good example is the 3-pack baking potato; quality potatoes in a three pack that can cost as much as a 5lb bag. Why? People don't use three pounds of potatoes before they go bad.

2) Time is NOT on your side. Consumers are looking for the quick fix. The ready to eat or with minimal preparation market is booming. People want products that require little or no work but still taste good and are nutritious -- not just “fast food”. You will notice the shrinking of the fresh meat counter in favor of the pre-seasoned, easy to prepare, or ready to eat meats. The proliferation of new products is amazing. In this category, convenience is mandatory not just an issue.
A good example is Banquet, the longtime staple of frozen TV dinners, (the first convenience food offering in the mid 50’s) has introduced new crock-pot frozen meals. Grab-and-go packed carrots and celery produced by California-based Ready Pac will appear in grocery stores this year. Ready Pac is also selling ready-to-go “bistro” salad bowls — Cobb salad, chicken Caesar, blue cheese. The package keeps meat and other proteins separate from greens. It comes with a fork and dressing and is ready to tuck into a lunch bag. Del Monte makes grab-and-go cups of fresh-cut fruit.
Important info: The prepared meals market will grow by 16.5% over the next five years according to “Research and Markets” company.
What this means: Products need to be simple to prepare or almost ready with minimal food preparation time. The easier you make someone’s life, the more loyal they will become to your product. Keep thinking about the top tier restaurants that are offering take out service in great branded packaging.

3) People are becoming more health conscious and really are learning more about what they eat. How many diets have you read about this week? Is the low carb craze in or out? The low carb craze and the trans fat concern are just two of the recent health trends.
What this means: Products that contain unhealthy fats or other ingredients are being scrutinized. Companies are providing reduced calories versions in addition to regular product offerings. People shop for healthier versions of products they used to buy. Even fast food companies are taking notice with healthy new product offerings. Watch for continued growth in this category. Pay attention to ingredient panels and special information tags such as “contains no trans fats” or “only X carbs.”
What this means to you: Make clear ingredients statements in your package design. Don’t confuse or mislead the customer with hidden information. They will read the ingredient statements and make an informed purchasing decision.

4) People are looking for products they can access on the run. When was the last time you or your significant other went to the store and purchased everything you needed for the entire week? Consumers are buying products in unconventional places like a drive throughs with take out service or a convenience store with high caliber products.
What this means: Unconventional types of retail outlets, such as convenience stores, are experiencing strong growth. Look for continuing packaging innovations in this category.

5) People are spending money to treat themselves to a little luxury.
Feeling a little neglected or sorry for yourself? You deserve something special and you are not alone. Luxury purchases are on the rise. People are willing to buy expensive treats for themselves for daily use not just for special occasions.
Important info: Last year the typical luxury consumer spent $33,188 on average buying luxuries, an increase of 33 percent over their reported spending of $25,010.

6) Food safety is becoming paramount.
What this means to you: No longer are the words tampering and bio terrorism buzz phrases. They are facts of life. Product integrity will become increasingly important to consumers. New packaging ideas have been developed in response to growing food manufacturer fears about food safety and tampering. Packaging is likely to perform a key role in establishing and maintaining consumer confidence.

7) Environmentally friendly biodegradable packaging is another growth area, reflecting consumer and retailer awareness of the issue of waste disposal and excess packaging materials.
What this means to you: A large number of packaging firms are launching products made of 100 percent recycled materials. There is increasing evidence of biodegradable inks on the market. All it takes is a few early adapters to make huge swings in the use of environmentally friendly materials. Do you remember how quickly the market changed when McDonalds switched from an EPS clamshell to a paperboard product? It changed literally overnight. The entire packaging climate changed and some packaging companies went out of business because of it.

8) Niche markets for products are continuously created. Niches that are large enough to be very profitable.
What this means to you: New products are introduced for specific target markets. No longer can one product capture the majority of a consumer segment. Many of these markets are obscure but very lucrative. Innovation is continuing at a rampant pace. Look for new and previously untapped markets. Two growing areas are products marketed to women and boomers.
Important Info:
The over 50 market is the hottest underserved market. With 76 million U.S. boomers born between 1946 and 1964, the potential for profit and growth are enormous. Every seven seconds, someone is turning 50 years old. Baby boomers will push the number of 50-and-over adults to more than 108 million by 2015. Think of all those product sales that is if you are smart and are targeting those markets

9) Look for the continued growth of dual-purpose products.
What this means to you: Growth can come from unlikely areas. Markets that were once strong have become so diluted they have become unprofitable.
New product categories will continue to develop. The “phood” or pharmaceutically engineered and enhanced food category is hot. Explore the opportunities for new product introductions that fall under these parameters.

10) Competition will continue unabated.
What this means to you: Today's market leader may be tomorrow's out of business company. Keep abreast of changing technology and packaging innovation is the key to continued success.

So no matter who is your consumer you need to understand what will drive them ultimately to purchase your product.


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