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Impact of Product Packaging on

consumer Buying Behavior


BBA-C
Sana Ahmad (14L-4674)

Hadia Nadeem (14L-4755)

Abu Bakar Ghumman (14L-4813)

Sana Tariq (14L-4935)

Hina Tabassum (14L-4792)


Contents
Table of Figures: ............................................................................................................................................ 2
Executive Summary:...................................................................................................................................... 3
Problem Statement: ...................................................................................................................................... 4
Research Objective: ...................................................................................................................................... 4
Literature Review: ......................................................................................................................................... 4
Research Design: ........................................................................................................................................... 5
Methodological Framework:..................................................................................................................... 5
Independent Variables: ............................................................................................................................. 5
Dependent Variables: ........................................................................................................................... 5
Mediator ....................................................................................................................................................... 5
Hypothesis: ........................................................................................................................................... 5
Data collection: ............................................................................................................................................. 6
Data Analysis: ................................................................................................................................................ 7
Correlation: ............................................................................................................................................... 7
Model: ........................................................................................................................................................... 7
...................................................................................................................................................................... 7
Data Analysis and Statistical Methodology .................................................................................................. 8
Tables and Interpretations: ............................................................................................................................ 8
Sample Profile (Table#1) .......................................................................................................................... 8
Factor Analysis (Table#2)......................................................................................................................... 9
CR and AVE (Table#3) ............................................................................................................................ 9
Hypothesis Testing (Table#5) ................................................................................................................. 10
Before any relationships between constructs can be tested, a global evaluation of the structural model is
essential (Hair, Ringle and Sarstedt 2011). The predictive relevance of structural models is secured by
the coefficient of determination (R2) and the beta values (Fornell , Johnson, et al. 1996). The values of
R2 show the predictive relevance of the model. ..................................................................................... 11
Bibliography: ............................................................................................................................................... 12
Table of Figures:
Figure 1 .......................................................................................................... Error! Bookmark not defined.
Figure 2 .......................................................................................................... Error! Bookmark not defined.
Figure 3 .......................................................................................................... Error! Bookmark not defined.
Executive Summary:
Weconducted research to find out the role of product packaging on consumer buying behavior.
The purpose of this research was to determine that which variables of product packaging affect
the buying decisions of consumers.In our research we chose Color, Material and Innovation in product
as independent variables and Consumer Buying behavior as the dependent variable. Besides this we also
chose a mediating variable that is Packaging Design.Though these variables have been covered before
multiple times in literature but there has been no known research of empirical nature.

The relationship between the variables is quite unique and ecstatic in a way that Packaging Attractive
Colors, Durable Material and Innovation if used in a unique way can make the overall design of product
packaging attractive which will trigger the consumer to buy the product.

Now during our research we took reference from several already written literature and those to by
renowned researchers like Parasuraman, Zeithaml,Berry and Gummesson etc.Furthermore we developed
three different kind of hypothesis. The sample that we collected was of 150 participants and it was
collected randomly. Sample of 50 respondents was collected by hand from FAST University and the rest
sample of 100 respondents was collected online. Out of a sample of 150 individuals, 54% were males
while 45% were females.Construct reliability and discriminant validity were proved. After doing the
hypothesis testing, it was proved that Material and Innovation have a positive relationship with dependent
variable while the color has negative relationship with dependent variable. Also mediator has positive
relationship with dependent variable. Out of four hypotheses, one hypothesis is rejected.

As of time constraints mentioned in detail further in the report we could only collect the data from Fast
University and online. The data we collected was then recorded in SPSS and PLS then analyzed and
interpreted accordingly. All the table and analysis are mentioned below in the detailed report.
Problem Statement:
The problem statement is to find out what are the effects of product packaging material, color,
innovation on consumer buying behavior with the mediating effect of product design.

Research Objective:
The objective of this research is to find:

How product packaging affects consumer buying behavior.


To check the effect of packaging element on buying behavior
To measure the relative impact of each packaging element on consumer buying behavior
To identify which element should be highlighted which design the packaging

Literature Review:
Packaging acts multidimensional functions. It offers knowledge about the product and
organizations, a technique to communicate with consumers and safeguard to the quality of the
product (silayoi&Speece, 2007). Packaging has become a sales instrument for the organizations.
The consumer purchasing behavior is also influenced by the packaging color, quality, wrapper,
and other aspects of packaging material. Packaging is an ultimate selling proposition, which
trigger buying behavior. Packaging increases revenue, market share and decreases promotional
costs for a product. Packaging appeals customers attention for a certain brand, increases brand
imagery and influences consumers buying perceptions about products. Moreover, package
conveys distinguish value to products and works as a tool for differentiation, and make it easy
for consumers to decide about a product from wide range of same products.

Past researches show that there is no single point for classification of packaging and its elements.
People also disregarding the methods of packaging impact on customer are buying behavior.
Many researchers attempt to find all potential aspects of packaging and their influence on
consumers buying behavior, on the other hand several focused on distinct key factors of
packaging and their effect on consumer buying. Furthermore, researchers are also exploring the
effect of packaging on consumers overall purchase decision, while, many others on each step of
decision making process some of them are mentioned over here.

Saeed, Lodhi, Mukhtar, Hussain, Mahmood and Ahmad (2011), integrate the brand image, brand
attachment and environmental effects and their impact on consumer purchase decision. Results
elaborates that brand image dont have a positive relation with purchase decision, brand
attachment has a moderate positive relation with purchase decision and environmental effects but
dont have a positive relation with purchase decision (Ahmed, Arif&Meenai, 2012).

The consumers purchase more quantity of the products, after looking a well-labeled product.
Therefore labeling influences the consumer buying behavior, but there are some other factors
also, which influence the consumer buying behavior (Saeed, Lodhi, Rauf, Rana, Mahmood &
Ahmed, 2013).

Research Design:
There are two types of researches quantitative and qualitative research. Quantitative research is
about asking people for their opinions in a structured way so that we can produce hard facts and
statistics to guide us. To get reliable statistical results, it's important to survey people in fairly
large numbers and to make sure they are a representative sample of our target market. The
research conducted to identify the impact of packaging on consumers buying behavior is a
quantitative research. The research contains a random sample of 150 respondents and it was
conducted at random places to test the buying behavior of random sample population. The data
collection design of our research is primary as we have used surveys to collect data from random
sample population.

Methodological Framework:

Independent Variables:
Product packaging material
Product packaging color
Product packaging innovation

Dependent Variables:
Consumer `Buying Behavior

Mediator
Product Packaging Design

Hypothesis:

Hypothesis#1: There is a positive relationship between product design and consumer buying
behavior.
Ulrich R. Orth (2009) Packaging is used for identification of the product. It plays an
important role in attracting the customers. Eye-catching graphics make the product stand out on
the shelf and attract the customers. Graphics can affect though colors and printed lines on the
package on which different signs and symbols are located. Holograms and combinations of
various materials can encourage customers to touch the package, thereby inspiring them to try
the product.(Rundh2009).

Hypothesis#2: There is a positive relationship between product packaging material and


customer buying behavior with the mediating effect of design.
Material of packaging is important element which prevents the product from loss. High quality
material will attract customers more than a low (Shah, Ahmad & Ahmad, 2013).

Hypothesis#3: There is a positive relationship between product packaging color and consumer
buying behavior with the mediating effect of design.
It has been proved that colors have strong effect on perception and therefore colors of packaging
can be important. The right choice of colors I an important factor in creating the impression
needed to influence brand and product selection (Gofman 2010). Color of packaging has an
important role in making apart one company product from other. Cheskin (1957) says that the
selection of colors and color combination is a necessary process for creating a good design
package. Color is a key element of design due to the fact that it is usually vivid and memorable.
The package color can have a significant effect on consumers ability to recognize the product.
Packaging color draws attention of the consumers. Every color creates different meaning
according to consumer perception. White and black color are used for creating power, red for
energy, blue is used for trust, green for balance.

Hypothesis#4: There is apositive relationship between product packaging innovation and


consumer buying behavior with the mediating effect of design.
Bringing innovation in the packaging design also increase the value of the product like easy
open, recyclable, easy store, breakability, child proof, eco-friendly, etc. in the consumer mind
(Shah et al., 2013).

Data collection:
There are two kind of approaches in data collection first is primary data collection which is used
when we want to find new results which is mostly the Questionnaires and secondary data
collection in which we use secondary data like : books, journals, newspapers etc. for the
research. In order to collect data to find out the role of packaging on consumers buying
behavior, wehave collected data by identify the impact of 3 independent variables on 1
dependent variable along with the effect of mediator. For this we have used primary data
collection technique in which we used questionnaire to find out the actual impact of product
packaging on consumers buying behavior.
Data Analysis:
To efficiently analyze our data we haveused SPSS softwareand SmartPLS software in order to
find the relationship between the data which we gathered through surveying random sample
population.

Correlation:
The Pearsons correlation is used to find out the relation between at least two variables. The
values for correlations are:

1. 0.00 = No correlation 2. 1.00 = perfect/positive correlation.


2. Other factors such as group size will be determined if the correlation is significant.
Generally, correlation above 0.80 is considered pretty high.

Model:
Independent variableMediatorDependent variable

Product Color

Consumer Buying
Product
Product Material Behavior
Design

Innovation in
Packaging

Measurement Scale
Before consolidating the case of the survey, it was important to shape questions which would
give direct answers on the primary research questions.
All of the constructs were measured using five-point Likert scale. The respondents were asked to
respond using a five point Likert scale in which 1-5 ranks were assigned to vary degree of
agreement and disagreement. These instruments are designed for the ease of respondents and
they do not require proper training to use them.
Respondents were asked about their product packaging choice and perspective. We asked
respondents if they had any emotional attachment with the color of product packaging. This
empowered us to acquire a variety of viewpoints. We also talked about respondents color
preferences.
We asked respondents questions about their perceived behavior about color, material and
innovation in product packaging.
There was only one demographic variable and that was gender. However, other constructs were
measured using different scales.
We used Likert scale for all constructs to forthe ease of respondents as well as our measurement.

Data Analysis and Statistical Methodology

The data collected through questionnaire was analyzed using SPSS software and Smart PLS.
It is useful to take a look at the data type before beginning the analysis procedure. When using
quantitative examination, data could be grouped under categorical or quantitative variables.
At the point when the measuring scales of information are numerical qualities, then they are
arranged under quantitative variables.
At the point when the measurement scale of data is a set of categories then they are characterized
under categorical variables (Agresti, et al. 2009).

Tables and Interpretations:


Sample Profile (Table#1)

Sample Sample
Variable n %
Gender
Male 82 54.66%
Female 68 45.33%

Can product
packaging color
trigger you to buy
that product
Strongly Disagree 5 3.33%
Disagree 23 15.33%
Neutral 37 24.67%
Agree 60 40%
Strongly Agree 25 16.67%
Table 1 shows the samples profile. The demographic variable from the questionnaire was
analyzed. Out of a sample of 150 individuals, 54% were males while 45% were females.

Factor Analysis (Table#2)

Constructs Items Item Loadings


Color Color1 0.783
Color2 0.643
Color3 0.476
Color4 0.718
Material Material1 0.504
Material2 0.751
Material3 0.777
Material4 0.724
Design Design1 0.847
Design2 0.847
Consumer Buying Behavior Consumer Buying Behavior1 0.710
Consumer Buying Behavior2 0.710
Innovation Innovation1 0.833
Innovation2 0.833

None of the factor items has removed because all the item loadings are greater than 0.3.

CR and AVE (Table#3)


Construct AVE CR
Color 0.4228 0.7426
Consumer Buying Behavior 0.7015 0.8233
Design 0.7095 0.8291
Innovation 0.6912 0.8170
Material 0.4851 0.7858

For the purpose of evaluating the measurement model and hypothesis testing, partial least
squares-structural equation modeling (PLS-SEM) has been used. PLS-SEM has become
increasingly popular for marketing studies and has appeared in all the top marketing journals.
One of the reasons for PLS-SEMs immense popularity is that it does not require for the data to
be normal (Hair, et al. 2012). According to (Hair, et al. 2012), researchers use PLS-SEM for
`small sample sizes and when data is not normal. However, for this study a relatively large
sample of 350 individuals were used to capture more variance in the analysis. We used
SmartPLS version 2.0.M3 for the purpose of path modeling and data analysis (Ringle, Sarstedt
and Straub 2012).
According to (Bagozzi and Yi 1988) construct reliability can be achieved if composite reliability
(CR) exceeds 0.60 and convergent validity can be achieved if the average variance (AVE)
exceeds 0.50. Looking at the table, all the CR values are more than the minimum criteria. The
AVE values of Color and Material are less than 0.50.

Inter-Construct co-relations and Discriminant Validity (Table#4)

This table shows the values of discriminant validity after taking the square root of AVE values.

Color Behavior Design Innovation Material


Color 0.6502 0 0 0 0
Behavior 0.5012 0.8375 0 0 0
Design 0.3545 0.6179 0.8423 0 0
Innovation 0.4188 0.598 0.4817 0.8314 0
Material 0.5201 0.5761 0.4839 0.5876 0.6965

In order to check the discriminant validity of all the 5 constructs, the process as suggested by
(Fornell and Larcker, Evaluating Structural Equation Models with Unobservable Variables and
Measurement Error 1981) was utilized. For discriminant validity to be achieved, the square root
of the AVE values of each construct should exceed the highest correlation between the construct
and other variables in the model. Above table shows that discriminant validity is achieved for all
constructs. The questions are in their respective constructs.

Hypothesis Testing (Table#5)

Independent Dependent
R2 T Results
variable Variable
Consumer
H1 Color Buying 0.097 0 0.801 Reject
Behavior
Consumer
H2 Innovation Buying 0.285 0 2.102 Accept
Behavior
Consumer
H3 Material Buying 0.266 0 2.146 Accept
Behavior
Consumer
H4 Design Buying 0.618 0.3 7.757 Accept
Behavior
Before any relationships between constructs can be tested, a global evaluation of the structural
model is essential (Hair, Ringle and Sarstedt 2011). The predictive relevance of structural
models is secured by the coefficient of determination (R2) and the beta values (Fornell , Johnson,
et al. 1996).The values of R2 show the predictive relevance of the model.
With a 1 unit increase ofProduct Color, 9.7% of Consumer buying behavior will be increased.
With a 1 unit increase ofProduct Innovation, 28. 5% of Consumer buying behavior will be
increased. With a 1 unit increase of Product Material, 26.6% of Consumer buying behavior will
be increased.With a 1 unit increase ofProduct Design, 61.8% of Consumer buying behavior will
be increased.

PLS-SEM bootstrapping method was adopted and out of 5000 samples, 150 cases were tested.
The results of the hypothesis testing can be found in Hypothesis testing table. According to
(Hair, Ringle and Sarstedt 2011), hypothesis should be accepted at 5% level of significance if its
t-value is greater than 1.96. Product Color and Consumer Buying behavior do not have a positive
linear relationship as 0.801 is less than 1.96 so H1 is not accepted. H1, H2 and H3 are accepted
as their T-values are greater than 1.96.

Mediation Test for Product Design:

A mediation test was suggested by (Baron and Kenny 1986) and three conditions were brought
forward. Firstly, there should be a significant relationship between mediator and independent
variable. Secondly, there should be a significant relationship between mediator and dependent
variable. Lastly, a test is essential to see if there is a relationship between independent and
dependent variable in the absence of the mediator.Table 5 shows the T- values of independent
variables which all are greater than 1.96 that shows a significant relationship between
independent variables (materials, innovation) and mediator (Design) except for Product Color
whose T-value is less than 1.96 that shows there is no significant relationship between color and
Product Design also our H1 is not supported. Due to one variable (color) first condition is not
met. Second condition has met because there is a significant relationship between Design and
Consumer Buying Behavior as T-value is greater than 1.96. Third condition has also met because
there is a significant relationship between independent variables and dependent variable as T-
values are all greater than 1.96. Below is a screen shot for third condition.

Theoratical Contribution

In Pakistani culture color is not a power full indicator of consumer buying behavior as it is not
much important factor for a condumer to buy a product only because of color of packaging
material. packaging of product is not important only in food/beverage industry but it could be
important for other comsumer goods as well for example dresses, household goods, electronics
etc.

Management Implications

Organizations shoud not focus only on product and its quality but on the design and innovation
in product packaging for examples Nestle chocolates, Michaels, Toblerone etc are famous for
their packaging in children and adults. packaging material should be eco-friendly. Innovation in

packaging leaves a great brand image for example no one will buy an expansive burger untill it is
in MacDonald's packing.

Limitations

Time and resources was limited.


Offline quastionnaire was filled in Lahore only.
Different people have different emotional responses for different colors.
it might be possible that respondent have neurtal colors in their mind while filling the
survey i.e natural colors are black, beig, ivory and taupe etc, these colors do not affect
consumer behavior

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