A core element of marketing, packaging helps support and influence other aspects of marketing such as positioning and pricing. In a literal sense, packaging helps to store, transport, and display the product. Packaging also involves bundling, which is packaging related products together, in an effort to increase revenue—average order value (AOV)—and add more value for customers.
For many consumer goods, packaging can be literal: the type of nozzle, the shape, and the size of the water bottle. On the other hand, for enterprise software, packaging conversations can revolve around how licensing is determined: is it based on number of users, applications run, or data consumed (GiB)?
The tactical specifics of packaging differs, depending on the industry and market. It’s particularly manifested differently in B2B and B2C products. However, the core tenets of packaging strategy remain true for most; effective packaging strategy helps:
- Aligns product with your brand
- Enables product utilization
- Helps determine pricing
- Offers competitive differentiation
In determining packaging for your product, pay attention to three maxims:
- Align with the market
- Be in sync with other marketing components
- Be customer-centric
Align with the Market
As with product development, pricing, and messaging, pay less heed to what competitors are doing and more to initiatives that align with your market, goals, and overall trends.
Take Netflix. At its inception, the media-services company was following a similar model as its closest competitor, Blockbuster: pay-per-rent. In September 1999, Netflix introduced a new consumption model—pay a single monthly fee, get unlimited access to a vast amount of programming. This shift provided the tailwinds for Netflix, allowing it to both increase its user base in both the short-term and long-term, with the new model being more favorable to shifts in technological and socioeconomic trends: faster data speeds, lower bandwidth costs, and more users on the Internet.
Be In Sync with other Marketing Components
Packaging should align with positioning. Packaging is often the first touchpoint for many products, a key aspect in the buyer’s journey. As such, it should convey the value and brand connotation of your product.
If your product’s value proposition is operable by anyone, your packaging should reflect that, incorporating simplicity and making a frictionless experience a priority.
Customer empathy doesn’t stop with product features. Every aspect of both the product and buying experience must be customer-centric.
Great packaging can remove friction from both the buyer’s journey and the product experience. Consider how prospects and customers approach the problem they’re trying to solve—not solely how the solution is implemented technically.
For instance, let’s propose you develop a premium navigation application promising users the ability to go from point A to point B in the fastest way possible (for a price). The key aspect of the implementation with regard to engineering is the dynamic cadence of API calls to services that return metrics on factors that influence traffic: weather and accident reports. Perhaps, what matters to your engineering and finance stakeholders is the number of API calls made.
This shouldn’t be how your product is packaged.
Rather, your premium navigation application should be priced as a subscription model (unlimited trips a month), pay-per-trip, or another variant that is based on the value you offer from a customer point of view, not the technical implementation.